> 


WORK  AND   WEALTH 


THE  MACMILLAN  COMPANY 

NEW  YORK  •  BOSTON  •  CHICAGO  •  DALLAS 
ATLANTA  •  SAN  FRANCISCO 

MACMILLAN  &  CO.,  LIMITED 

LONDON   •  BOMBAY   •  CALCUTTA 
MELBOURNE 

THE  MACMILLAN  CO.  OF  CANADA,  LID. 

TORONTO 


WORK  AND  WEALTH 


A  HUMAN   VALUATION 


BY 

J.    A.    HOBSON 

AUTHOR  OF  "  THE  INDUSTRIAL  SYSTEM,"  "  THE  EVOLUTION  OF 
MODERN  CAPITALISM,"  ETC. 


Nrm  fork 
THE  MACMILLAN   COMPANY 

1921 

All  rights  reserved 


COPYRIGHT,  1914, 
BY  J.  A.  HOBSON. 


Set  up  and  electrotyped.    Published  May,  191,4. 


WortoooB 
Berwick  &  Smith  Co.,  Norwood,  Mass.,  U.S.A. 


LI" 

•TATE    is.  . KO6 

SANTA  BARBARA,  c    i  . 


PREFACE 

The  goods  and  services  that  constitute  our  national  income 
are  valued  severally  and  collectively  with  a  fair  amount  of 
accuracy  in  terms  of  money.  For  a  gold  standard,  though  by  no 
means  perfect  for  the  work  of  monetary  measurement,  is  stable 
and  has  a  single  definite  meaning  to  all  men.  By  means  of  it  we 
can  estimate  the  rates  of  growth  or  decline  in  our  industry,  as 
an  aggregate  or  in  its  several  departments,  and  the  quantities  of 
output  and  consumption  of  the  various  products.  We  can  com- 
pare the  growth  of  our  national  wealth  with  that  of  other  nations. 

But  how  far  can  these  measurements  of  concrete  wealth  fur- 
nish reliable  information  regarding  the  vital  values,  the  human 
welfare,  which  all  economic  processes  are  designed  to  yield? 
Though  it  will  be  generally  admitted  that  every  increase  of 
economic  wealth  is  in  some  measure  conducive  to  welfare,  every 
decrease  to  illfare,  nobody  will  pretend  even  approximately  to 
declare  what  that  measure  is,  or  to  lay  down  any  explicit  rules 
relating  wealth  to  welfare,  either  for  an  individual  or  a  nation. 
Indeed,  even  the  general  assumption  that  every  growth  of  wealth 
enhances  welfare  cannot  be  admitted  without  qualification.  An 
injurious  excess  of  income  is  possible  for  an  individual,  perhaps 
for  a  nation,  and  the  national  welfare  which  an  increased  volume 
of  wealth  seems  capable  of  yielding  might  be  more  than  cancelled 
by  a  distribution  which  bestowed  upon  a  few  an  increased  share 
of  the  larger  wealth,  or  by  an  aggravation  of  the  toil  of  the  pro- 
ducers. 

Such  obvious  considerations  drive  us  to  seek  some  intelligible 
and  consistent  method  of  human  valuation  for  economic  goods 
and  processes.  To  find  a  standard  of  human  welfare  as  stable 
and  as  generally  acceptable  as  the  monetary  standard  is  mani- 
festly impossible.  Indeed,  the  difficulties  attending  any  sort 
of  calculus  of  vital  values  might  appear  insuperable,  were  it  not 
for  one  reflection.  Every  statesman,  social  reformer,  philan- 

v 


vi  PREFACE 

thropist,  every  public-spirited  citizen,  does  possess  and  apply 
to  the  conduct  of  affairs  some  such  standard  or  criterion  as  we  are 
seeking.  Some  notion  or  idea,  more  or  less  clear  and  explicit,  of 
the  general  welfare,  crossed  and  blurred  no  doubt  by  other  in- 
terests and  passions,  is  an  operative  and  directive  influence  in  his 
policy.  Moreover,  though  idiosyncrasies  will  everywhere  affect 
this  operative  ideal,  there  will  be  found  among  persons  of  widely 
different  minds  and  dispositions  a  substantial  body  of  agreement 
in  their  meaning  of  human  welfare.  The  common  social  environ- 
ment partly  evokes,  partly  imposes,  this  agreement.  In  fact,  all 
cooperative  work  for  social  progress  implies  the  existence  of  some 
such  standard  as  we  are  seeking.  The  complex  image  of  human 
values  which  it  contains  is  always  slowly  changing,  and  varies 
somewhat  among  different  sorts  and  conditions  of  men.  But  for 
the  interpretation  of  economic  goods  and  processes  it  has,  at  any 
time,  a  real  validity.  For  it  is  anchored  to  certain  solid  founda- 
tions of  human  nature,  the  needs  and  functions  to  which,  alike 
in  the  individual  and  in  the  society,  we  give  the  term  'organic.' 

Only  by  considering  the  organic  nature  of  man  and  of  human 
society  can  we  trace  an  intelligible  order  in  the  evolution  of 
industry.  The  wants  of  man,  and  therefore  the  economic  opera- 
tions serving  them  must  be  treated  as  organic  processes.  This 
term,  borrowed  from  biology,  must  be  extended  so  as  to  cover 
the  entire  physical  and  spiritual  structure  of  human  society,  for 
no  other  term  is  so  well  fitted  to  describe  the  nature  of  the  federal 
unity  which  society  presents.  The  standard  of  values  thus  set 
up  is  the  current  estimate  of  'organic  welfare.' 

The  justification  of  these  terms  and  of  this  mode  of  human 
valuation  is  to  be  found  in  their  application  to  the  task  before 
us.  These  tools  will  be  found  to  do  the  work  better  than  any 
others  that  are  available. 

In  seeking  to  translate  economic  values  into  human  by  refer- 
ence to  such  a  standard  of  organic  welfare,  I  take  as  the  aptest 
material  for  experiment  the  aggregate  of  goods  and  services  that 
constitute  the  real  income  of  the  British  nation.  In  order  to  re- 
duce that  income  to  terms  of  human  welfare,  I  first  examine 
separately  the  economic  costs  of  production  and  the  economic 
utilities  of  consumption  which  meet  in  this  concrete  wealth, 


PREFACE  vii 

analysing  them  into  human  cost  and  human  utility,  the  debit 
and  credit  sides  of  the  account  of  welfare.  Analysis  of  the  pro- 
ductive processes  will,  of  course,  disclose  the  fact  that  not  all 
'economic'  costs  have  human  costs  attached  to  them,  but  that 
human  utilities  of  varying  value  inhere  in  many  sorts  of  pro- 
ductive work.  Surveying  the  different  orders  of  productive 
energy,  from  the  finest  arts  to  the  lowest  modes  of  routine  toil, 
we  discover  that  any  two  bodies  of  economic  wealth,  possessing 
the  same  pecuniary  value,  may  differ  enormously  in  the  quantity 
of  human  cost  they  carry.  For  that  cost  will  depend  upon  the 
nature  of  the  work,  the  nature  of  the  workers,  and  the  distribu- 
tion of  the  work  among  the  workers.  This  line  of  enquiry  opens 
out,  in  form  at  any  rate,  a  complete  criticism  of  current  English 
industry,  from  the  humanist  standpoint.  A  similar  analysis 
applied  on  the  consumption  side  resolves  the  economic  utility 
of  the  goods  and  services  into  human  utility.  Here  again  out 
of  economic  utilities  much  human  cost  emerges,  just  as  out  of 
economic  costs  much  human  utility.  Equal  quantities  of  income 
yield  In  their  consumption  widely  diverse  quantities  of  human 
utility  or  welfare. 

Piecing  together  the  two  sides  of  our  enquiry  into  the  produc- 
tion and  consumption  of  the  income,  we  perceive,  as  might  be 
expected,  that  a  sound  human  economy  conforms  to  the  organic 
law  of  distribution,  'from  each  according  to  his  power,  to  each  ac- 
cording to  his  needs/  and  that,  precisely  so  far  as  the  current 
processes  of  economic  distribution  of  work  and  of  its  product  con- 
travene this  organic  law,  waste  accrues  and  illfare  displaces  wel- 
fare. The  economic  distinction  between  costs  and  unearned  sur- 
plus 1  furnishes  in  effect  a  faithful  measure  of  the  extent  and  forms 
of  divergence  between  the  economic  and  the  human  'law'  of 
distribution.  For  when  this  surplus  income  is  traced,  backward 
to  the  human  costs  involved  in  its  production,  forward  to  the 
human  injuries  inflicted  by  the  excessive  and  bad  consumption 
it  sustains,  it  is  seen  to  be  the  direct  efficient  cause  of  all  the 
human  defects  in  our  economic  system.  Growing  in  magnitude 
with  the  development  of  the  modern  arts  of  industry  and  com- 
merce, it  is  the  concrete  embodiment  of  the  social-economic 

1  This  distinction  is  elaborated  in  my  work,  The  Industrial  System  (Longmans). 


viii  PREFACE 

problem.  The  absorption  and  utilisation  of  the  surplus  for  the 
betterment  of  the  working-classes  and  the  enrichment  of  public 
life  are  essential  conditions  for  the  humanisation  of  industry. 

The  first  half  of  the  book  is  occupied  with  the  general  exposi- 
tion and  illustration  of  this  method  of  human  valuation.  The 
second  part  applies  the  humanist  principles  thus  established,  to 
the  discussion  of  some  of  the  great  practical  issues  of  social- 
economic  reconstruction  in  the  fields  of  business  and  politics. 
The  medley  of  overlapping  conflicts  between  capital  and  labour, 
producer  and  consumer,  competition  and  combination,  the  in- 
dividual and  society,  is  sifted  so  as  to  discover  lines  of  industrial 
reformation  based  upon  a  conception  of  organic  harmony.  The 
reconstruction  of  the  business,  so  as  adequately  to  represent  in 
its  operation  the  respective  interests  of  capital,  ability,  labour 
and  the  consumer,  is  seen  to  be  the  first  desideratum  of  reform. 
Here,  as  in  the  wider  oppositions  between  business  and  business, 
trade  and  trade,  nation  and  nation  (misconceived  as  economic 
units),  the  more  rational  standpoint  of  a  humanist  valuation 
suggests  modes  of  reconcilement  following  an  evolution  of 
economic  structure  in  which  the  corporate  or  cooperative  spirit 
finds  clearer  and  stronger  expression.  The  most  debated  ques- 
tion, how  far  ordinary  human  nature  can  yield  economic  motives 
to  social  service  strong  and  reliable  enough  to  enable  society 
to  dispense  with  some  of  the  incentives  of  competitive  greed, 
hitherto  deemed  indispensable  supports  to  industry,  is  discussed 
in  several  of  the  later  chapters.  The  practicable  limits  of  in- 
dustrial reformation  are  found  to  depend  upon  the  reality  and 
importance  assigned  to  'the  social  will'  as  a  power  operative  for 
industrial  purposes,  in  other  words  upon  the  strength  of  the 
spiritual  unity  of  society.  A  final  chapter  is  given  to  a  discussion 
of  the  limitations  of  the  scientific  and  quantitative  methods  in  the 
interpretation  and  direction  of  social-economic  life.  It  is  con- 
tended that  the  art  of  social  as  of  individual  conduct  must 
always  defy  exact  scientific  guidance,  the  methods  of  science 
being  incompetent  closely  to  predict  or  direct  the  creative  ele- 
ment in  organic  processes. 

The  processes  of  human  valuation  and  judgment,  therefore, 
whether  applied  to  industry  or  to  other  activities  and  achieve- 


PREFACE  ix 

ments,  must  ultimately  belong  to  the  art  rather  than  to  the 
science  of  society,  the  statesman  and  the  citizen  absorbing  and 
assimilating  the  history  of  the  past  which  science  presents  in  its 
facts  and  laws,  but  using  his  free  constructive  faculty  to  make 
the  history  of  the  future.  The  failures  of  the  individual  states- 
man or  citizen  in  the  performance  of  this  artistic  work  are  due 
to  the  fact  that  a  larger  artist,  whose  performance  the  most  en- 
lightened individual  can  but  slightly  apprehend,  viz.  society  it- 
self, takes  an  over-ruling  part  in  the  process. 

This  brief  presentation  of  the  argument,  dwelling  unavoidably 
upon  intellectual  method,  may  possibly  have  failed  to  convey  the 
intensely  practical  purpose  which  I  have  kept  in  mind  throughout 
the  preparation  of  the  book.  That  purpose  is  to  present  a  full  and 
formal  exposure  of  the  inhumanity  and  vital  waste  of  modern 
industry  by  the  close  application  of  the  best-approved  formulas 
of  individual  and  social  welfare,  and  to  indicate  the  most  hopeful 
measures  of  remedy  for  a  society  sufficiently  intelligent,  coura- 
geous and  self-governing  to  apply  them. 

Such  a  work  evidently  presents  a  large  frontfor hostile  criticism. 
Its  scope  has  often  compelled  a  rigorous  compression  in  the  dis- 
cussion of  important  controversial  topics,  and  has  precluded  all 
entrance  upon  the  more  detailed  issues  in  the  policy  of  reconstruc- 
tion. But  I  venture  to  hope  that  many  readers,  who  may  disagree 
with  the  particular  valuations  and  interpretations  offered  in  these 
chapters,  will  be  led  to  accept  the  broader  outlines  of  the  method 
of  human  valuation  here  proposed,  and  will  recognise  the  im- 
portance of  a  better  application  of  this  method  in  the  solutions 
of  the  practical  problems  of  economic  reform. 

J.  A.  HOBSON. 
HAMPSTEAD, 

January,  1914. 


TABLE  OF  CONTENTS 

CHAPTER  I  pAGE 

THE  HUMAN  STANDARD  OF  VALUE i 

§  i.  The  need  for  a  human  survey.  §  2.  The  attitude  of  eco- 
nomic science  towards  the  industrial  system.  §  3.  The  monetary 
standard  of  values.  §  4.  Some  inherent  defects  of  Political  Econ- 
omy for  human  valuation.  §  5.  The  humanist  standpoint  of 
Ruskin.  §  6.  Ruskin's  strength  and  weakness.  §  7.  Organic  wel- 
fare as  a  standard.  §  8.  Society  as  an  organism  or  an  organisa- 
tion? §  9.  Defence  of  the  organic  concept. 

CHAPTER  II 

THE  HUMAN  ORIGINS  or  INDUSTRY 19 

§  i.  Industry  emerging  from  organic  processes.  §2.  The  begin- 
nings of  a  rational  economy.  §  3.  Utility  and  self-expression  in 
work.  §  4.  The  severance  of  economic  from  other  human  motives. 

CHAPTER  III 

REAL  INCOME:  COST  AND  UTILITY 28 

§  i.  The  humanist  attitude  towards  income.  §2.  The  meaning 
of  national  income.  §  3.  Failure  of  pecuniary  measurement. 
§  4.  Standard  of  the  humanly  desirable.  §  5.  Human  problems  of 
production  and  consumption.  §  6.  The  analysis  of  cost  and  util- 
ity. §  7.  Economic  versus  human  costs.  §  8.  The  Business  as  a 
human  structure.  §  9.  Creation  and  imitation.  §  10.  Merits  and 
defects  of  the  distinction.  §  1 1.  Its  provisional  acceptance. 

CHAPTER  IV 

THE  CREATIVE  FACTOR  IN  PRODUCTION 44 

§  i.  Creation  in  the  fine  arts.  §  2.  Commercialism  in  art. 
§  3.  Interpretative  and  executive  art.  §  4.  Discovery  and  inven- 
tion in  the '  useful '  arts.  §  5.  The  economy  of  the  creative  faculty. 
§  6.  Professional  ability.  §  7.  Human  costs  of  professional  and 

xi 


xii  TABLE  OF  CONTENTS 

PAGE 

official  work.   §  8.  Psychology  of  the  financier  and  the  'business 
man '.    §  9.  Risk-taking  as  a  personal  cost. 

CHAPTER  V 

HUMAN  COSTS  or  INDUSTRY 60 

§  i.  Repetition  and  routine  the  essential  qualities  of  labour.  §  2. 
The  physiology  of  fatigue.  §  3.  Nervous  fatigue.  §  4.  Accidents 
and  disorders  from  fatigue.  §  5.  Ennui  and  painful  efforts.  §  6. 
Human  costs  of  conforming  to  routine. 

CHAPTER  VI 

THE  REIGN  OF  THE  MACHINE 72 

§  i.  Cooperation  of  Labour  and  Machinery.  §  2.  Limits  to  the 
reign  of  machinery.  §  3.  Direct  and  indirect  influences  of  the  ma- 
chine. §  4.  Has  machinery  lightened  or  aggravated  net  human 
costs? 

CHAPTER  VII 

THE  DISTRIBUTION  OF  HUMAN  COSTS 79 

§  i.  Apportionment  of  labour  according  to  age,  sex,  personal  ca- 
pacity. §  2.  Human  waste  from  labour  of  the  old,  the  young,  the 
weak.  §  3.  Natural  and  artificial  restrictions  on  woman's  work. 
§  4.  Costs  do  not  always  vary  with  routine.  §  5.  Summary  of 
physical  costs.  §  6.  Moral  costs  of  labour. 

CHAPTER  VIII 

HUMAN  COSTS  IN  THE  SUPPLY  OF  CAPITAL 89 

§  i.  Risk-taking  as  a  physical  and  psychical  cost.  §  2.  Risks  in- 
volved in  all  productive  work.  §  3.  Costly  and  costless  saving. 
§4.  Efforts  of  abstinence  and  postponement.  §5.  Distribution  of 
expenditure  over  time.  §  6.  The  possibility  of  costless  capital. 
§  7.  Automatic  saving  of  the  rich.  §  8.  Motives  in  the  saving  of 
the  thrifty.  §  9.  Human  costs  and  utilities  of  thrift.  §  10.  The 
heavy  costs  of  working-class  saving. 

CHAPTER  DC 

HUMAN  UTILITY  OF  CONSUMPTION 106 

§  i.  The  human  valuation  of  economic  utilities,  Wealth  and 
'Illth'.  §  2.  How  far  the  arts  of  production  and  consumption 


TABLE  OF  CONTENTS  xiii 

PAGE 

correspond.  §  3.  Slow  evolution  of  consumptive  arts.  §  4.  Pro- 
duction for  profit  endangers  consumption.  §  5.  Instinct  and  rea- 
son in  the  evolution  of  wants.  §  6.  Organic  safeguards  against 
waste.  §  7.  Growing  waste  with  rising  standards  of  consumption. 

CHAPTER  X 

CLASS  STANDARDS  OF  CONSUMPTION 121 

§  i.  Physical  environment  as  a  factor  in  class  standards.  §  2. 
Industrial  conditions  affecting  standards.  §  3.  Conventional  ele- 
ments in  consumption.  §  4.  Risks  in  '  Novelties '  under  individual 
choice.  §  5.  Imitation  as  a  maker  of  'conventions'.  §  6  .  How 
commercial  interests  damage  conventional  consumption.  §  7.  Hu- 
man values  in  conventional  and  routine  elements.  §  8.  The  play 
of  imitative  forces.  §  9.  The  modus  operandi  of  prestige.  §  10. 
Theory  of  a  leisure  class.  §  1 1.  Futile  expenditure. 

CHAPTER  XI 

SPORT,  CULTURE  AND  CHARITY 146 

§  i.  Sport -activities  and  survival  value.  §  2.  The  exploitation 
of  biological  utility.  §  3.  Degradation  of  the  sporting  life. 
Its  prestige.  §  4.  Intellectual  recreations.  Decorative  culture. 
§  5.  Ethics  of  the  sporting  life.  §  6.  Parody  of  the  lower  leisure- 
class.  §  7.  Race  exploitation  displacing  class  exploitation. 

CHAPTER  XII 

THE  HUMAN  LAW  OF  DISTRIBUTION 159 

§  i.  Human  costs  and  utilities  in  Production  and  Consumption. 
§  2.  The  same  laws  of  valuation  applicable  on  each  side.  §  3. 
Statement  of  the  human  law.  §  4.  Income  according  to  needs. 
§  5.  Identity  and  diversity  of  needs.  §  6.  Laissez-faire  as  a  law 
of  human  distribution.  §  7.  The  new  doctrine  of  Marginalism. 
§  8.  Its  logical  and  practical  defects.  §  9.  Fundamental  diver- 
gence of  the  economic  and  human  laws.  The  surplus.  §  10.  Or- 
igins and  nature  of  the  surplus.  §  n.  Rent  element  in  surplus. 
§  12.  Other  contributory  sources.  §  13.  Claims  of  'Ability'  to 
the  surplus.  §  14.  Theory  of  prizes  and  blanks.  §  15.  Summary 
of  injuries  and  wastes  from  the  surplus. 


xiv  TABLE  OF  CONTENTS 

CHAPTER  XIII 

THE  HUMAN  CLAIMS  OF  LABOUR 190 

§  i.  The  Labour  Movement's  basis  of  remuneration. 
§  2.  Ethics  and  economics  of  the  piece-wage  system.  §  3.  Growth 
of  the  salary  system.  §  4.  The  minimum  wage  policy. 
5.  Limitation  of  output.  §  6.  Public  supplements  to  wages. 

CHAPTER  XIV 

SCIENTIFIC  MANAGEMENT 202 

§  i.  Science  applied  to  business  organization.  §  2.  Experi- 
mental study  of  tools,  work  and  workers.  §  3.  The  intensifica- 
tion of  labour.  §  4.  Relation  of  economic  to  human  costs.  §  5. 
Applied  psychology.  Miinsterberg's  experiments.  §  6.  Selection 
and  adjustment  of  men  to  jobs.  §  7.  Will  workers  gain  in  wages? 
§  8.  The  mechanisation  of  labour.  §  9.  Reactions  on  the  progress 
of  the  industrial  arts  and  standards  of  life.  §  10.  Science  applied 
to  consumption.  §  n.  Dietaries  in  relation  to  work.  §  12.  Eu- 
genics and  education,  for  work  or  life?  §  13.  The  science  of  human 
industry. 

CHAPTER  XV 

THE  DISTRIBUTION  OF  LEISURE 228 

§  i.  The  upper  and  lower  leisured  classes.  §2.  Under  and  over- 
employment. §  3.  The  demand  for  an  Eight  Hours  Day.  §  4. 
Shorter  hours  in  relation  to  spare  energy.  §  4.  Double  injury  of 
long  work-day,  to  producer  and  consumer.  §  6.  Leisure  as  the 
opportunity  of  opportunities.  §  7.  Leisure  as  condition  of  educa- 
tion. §  8.  Leisure  and  invention.  §  9.  Non-economic  values  of 
leisure.  §  10.  The  place  of  leisure  in  class  standards  of  life.  §  n. 
Leisure  as  a  social  requisite. 

CHAPTER  XVI 

THE  RECONSTRUCTION  OF  INDUSTRY 250 

§  i.  Realisation  of  the  social  meaning  of  labour.  §  2.  Com- 
petition in  trades,  businesses  and  workers.  Its  dehumanising  ef- 
fects. §  3.  Harmony  and  discord  between  capital  and  labour. 
§  4.  Experiments  in  new  business  structure.  §  5.  Cooperation 
of  Capital  and  Labour.  §  6.  The  opposition  of  producer  and  con- 
sumer. §  7.  The  cooperative  movement  as  a  mode  of  settlement. 
§  8.  The  workers'  claim  for  a  share  in  business  control.  §  9.  The 


TABLE  OF  CONTENTS  rv 

PAGE 

balance  of  interests  in  business  structure.    §  10.  The  syndicalist 
idea.    §  n.  Dangers  of  bureaucracy. 

CHAPTER  XVII 

THE  NATION  AND  THE  WORLD 272 

§  i.  Nations  misconceived  as  economic  units.  §  2.  The  idea 
of  an  economic  world-state.  §  3.  Need  for  a  conscious  recogni- 
tion of  world  industry. 

CHAPTER  XVIII 

SOCIAL  HARMONY  IN  ECONOMIC  LIFE 276 

§  i.  Growing  harmony  within  the  Business.    §  2.  Organisation 
versus  competition  in  the  Trade.    §  3.  States  in  relation  to  monopo- 
lies and  combines.    §  4.  The  need  for  international  regulation  of 
Industry. 

CHAPTER  XLX 

INDIVIDUAL  MOTIVES  TO  SOCIAL  SERVICE 283 

§  i.  The  spiritual  assumptions  of  humanist  reforms.  §  2. 
Stimulation  of  Industrial  motives.  §  3.  Less  'costly'  production 
required.  §  4.  Limitations  of  the  claims  of  industry  on  life.  §  5. 
The  scope  of  individualism  and  private  enterprise.  §  6.  Moral  and 
social  significance  of  'the  Surplus.'  §  7.  Theory  of  Property  as  a 
social  trust.  The  test  of  Charity.  §  8.  Property  set  upon  a 
'proper'  basis.  §  9.  Beneficial  reactions  of  sound  property  upon 
other  functions. 

CHAPTER  XX 

THE  SOCIAL  WILL  AS  AN  ECONOMIC  FORCE 301 

§  i.  Early  stages  of  reconstruction  may  involve  some  economic 
loss.  §  2.  Esprit  de  Corps  or  common  consciousness  as  an  economic 
incentive.  §  3.  Wholesome  interaction  of  better  social  conscious- 
ness and  better  social  environment.  §  4.  Ultimate  reason  for  so- 
cialisation of  routine  industries.  §  5.  Social  life  justifies  the  rou- 
tine work  of  individuals.  §  6.  The  cells'  imperfect  realisation  of 
the  organism. 

CHAPTER  XXI 

PERSONAL  AND  SOCIAL  EFFICIENCY 310 

§  i.  The  organic  law  as  basis  of  personal  efficiency  for  pro- 
duction. §  2.  Personal  efficiency  for  consumption.  §  3.  Organic 


xvi  TABLE  OF  CONTENTS 

PAGE 

union  of  production  and  consumption.  §  4.  Will  society  enslave 
the  individual?  §  5.  Quantity  and  quality  of  work.  §  6.  The 
relations  between  material  and  non-material  wealth.  §  7.  Quan- 
tity and  quality  of  life. 

CHAPTER  XXII 

SOCIAL  SCIENCE  AND  SOCIAL  ART 320 

§  i.  'Enlightened  common  sense'  as  a  human  standard.  §  2. 
Limitation  of  a  quantitative  calculus.  §  3.  Quantitative  and  quali- 
tative facts.  §  4.  The  reduction  of  qualitative  to  quantitative 
differences.  §  5.  Scientific  politics.  §  6.  The  case  of  art-values. 
§  7.  Analysis  of  utility  of  income.  §  8.  How  mutations  and  nov- 
elty limit  science.  §  9.  Use  and  abuse  of  averages.  §  10.  Sum- 
mary of  uses  of  a  scientific  calculus.  §  1 1.  The  services  of  science 
to  human  arts.  §  12.  Final  futility  of  'marginalism.'  The  in- 
calculable. §  13.  Scientific  calculus  as  guide  to  conduct.  §  14. 
Organic  unity  imposes  values.  §  15.  Two  meanings  of  social  will 
and  social  value.  §  16.  Collective  instincts  in  Democracy.  §  17. 
General  will  in  instinct  and  reason.  §  18.  Creative  power  in 
collective  man.  §  19.  The  evolution  of  a  rational  social  will. 


WORK  AND  WEALTH 


WORK  AND   WEALTH 

CHAPTER  I 

THE  HUMAN   STANDARD  OF  VALUE 

§  i.  In  an  age  when  human  problems  of  a  distinctively  eco- 
nomic character,  relating  to  wages,  hours  of  labour,  housing, 
employment,  taxation,  insurance  and  kindred  subjects,  are  press- 
ing for  separate  consideration  and  solution,  it  is  particularly 
important  to  enforce  the  need  of  a  general  survey  of  our  economic 
system  from  the  standpoint  of  human  values.  Social  students,  of 
course,  are  justified  by  considerations  of  intellectual  economy  in 
isolating  these  several  problems  for  certain  purposes  of  detailed 
enquiry.  But  the  broader  human  setting,  demanded  for  the 
judgment  or  the  policy  of  a  statesman  or  reformer,  can  never  be 
obtained  by  this  separatist  treatment.  For  the  interactions  which 
relate  these  issues  to  one  another  are  numerous  and  intimate. 
Taking  as  the  most  familiar  example  the  groups  of  questions  re- 
lating to  the  working-classes,  we  recognise  at  once  how  the 
wages,  hours,  regularity  of  employment  and  other  considerations 
of  labour,  overlap  and  intertwine,  while,  again,  the  questions 
relating  to  conditions  of  living,  such  as  housing,  food,  drink, 
education,  recreation,  facilities  of  transit,  have  similar  inter- 
relations as  factors  in  a  standard  of  comfort.  Nor  is  it  less  evi- 
dent that  conditions  of  labour  and  conditions  of  living,  taken 
severally  and  in  the  aggregate,  interact  in  ways  that  affect  the 
efficiency  and  well-being  of  the  people. 

The  special  and  separate  studies  of  these  various  problems 
must  then,  in  order  to  be  socially  serviceable,  be  subject  to  the 
guidance  and  direction  of  some  general  conception  which  shall 
have  regard  to  all  sorts  of  economic  factors  and  operations,  assess- 
ing them  by  reference  to  some  single  standard  of  the  humanly  de- 
sirable. This  general  survey  and  the  application  of  this  single 


2  WORK  AND  WEALTH 

standard  of  valuation  are  necessary  alike  to  a  scientific  inter- 
pretation of  the  economic  or  industrial  world  and  to  a  conscious 
art  of  social-economic  progress.  They  must  exert  a  control  over 
the  division  of  intellectual  labour  on  the  one  hand,  and  over  the 
utilisation  of  such  labour  for  social  policy  upon  the  other.  The 
notion  that,  by  setting  groups  of  students  to  work  at  gathering, 
testing,  measuring  and  tabulating  crude  facts,  relating,  say,  to 
infant  mortality,  expenditure  on  drink,  or  wages  in  women's 
industries,  valuable  truths  of  wide  application  will  somehow  be 
spontaneously  generated,  and  that  by  a  purely  inductive  process 
there  will  come  to  light  general  laws  authoritative  for  social 
policy,  is  entirely  destitute  of  foundation.  The  humblest  grubber 
among  'facts'  must  approach  them  with  some  equipment  of 
questions,  hypotheses,  and  methods  of  classification,  all  of  which 
imply  the  acceptance  of  principles  derived  from  a  wider  field  of 
thought.  The  same  holds  again  of  the  next  higher  grade  of  stu- 
dents, the  intellectual  middlemen  who  utilise  the  'facts'  got  by  the 
detailed  workers  'at  the  face.'  They  too  must  bring  wider  prin- 
ciples to  correlate  and  to  interpret  the  results  got  by  the  humbler 
workers.  So  at  each  stage  of  the  inductive  process,  laws  and  stan- 
dards derived  from  a  higher  intellectual  stage  are  brought  to  bear. 
Even  if  such  studies  were  prompted  entirely  by  a  disinterested 
desire  for  knowledge,  it  is  evident  that  their  success  implies  the 
inspiration  and  application  of  some  general  ideas,  which  in  rela- 
tion to  these  studies  are  a  priori.  But  regarding  these  studies  as 
designed  primarily  to  assist  the  art  of  social  policy,  we  must 
recognise  that  the  inner  prompting  motive  of  every  question  that 
is  put  at  each  stage  of  such  enquiries,  the  inner  regulative  prin- 
ciple of  the  division  of  labour  and  of  the  correlation  of  the  results, 
is  the  desire  to  realise  some  more  or  less  clear  conception  of  gen- 
eral human  well-being.  It  must,  of  course,  be  admitted  that  this 
procedure  rests  upon  a  sort  of  paradox.  The  general  conception 
of  human  well-being  is  itself  vague  and  unsubstantial,  until  it 
has  acquired  and  assimilated  the  very  sorts  of  knowledge  the 
collection  of  which  it  is  here  assumed  to  be  able  to  direct.  This 
paradox,  however,  is  familiar  to  all  who  reflect  upon  the  progress 
of  knowledge  in  any  department  and  for  any  purpose.  I  only 
name  it  here  in  order  to  anticipate  the  objection  of  those  dis- 


THE  HUMAN  STANDARD  OF  VALUE  3 

posed  to  question  the  validity  of  assuming  any  sort  of  standard 
of  human  welfare,  and  to  insist  upon  testing  each  economic 
issue  upon  what  they  call  'its  own  merits.'  The  application  of  a 
general  survey  and  a  general  standard  of  values  is  none  the  less 
a  logically  valid  and  a  practically  useful  procedure,  because 
the  new  facts  which  its  application  discloses  afford  more  fulness 
and  exactitude  to  the  survey,  while  the  standard  is  itself  made 
clearer  and  more  effective  thereby. 

Assuming  it  to  be  admitted,  then,  that  a  human  valuation  of 
economic  processes  is  possible  and  desirable,  both  for  the  en- 
largement of  knowledge  and  for  purposes  of  social  policy,  the 
questions  next  arjse,  'How  shall  we  conceive  and  describe  the 
standard  of  human  valuation,  and  how  shall  we  apply  it  to  the 
interpretation  of  the  present  economic  system?' 

§  2.  Before  facing  these  questions,  however,  it  will  be  well  to 
have  before  our  minds  a  clear  outline  picture  of  this  economic 
system  which  we  seek  to  value.  It  consists  of  two  complex 
operations,  constantly  interacting,  known  as  Production  and 
Consumption  of  wealth.  By  wealth  is  understood  all  sorts  of 
vendible  goods  and  services.  So  far  as  material  wealth  is  con- 
cerned, it  is  '  produced '  by  a  series  of  processes  which  convert 
raw  materials  into  finished  goods  of  various  sorts  and  sizes  and 
dispose  them  in  such  quantities  as  are  required,  for  the  satisfac- 
tion of  consumers  or  as  instruments  in  some  further  process  of 
production.  Similarly,  in  the  case  of  professional,  official,  domes- 
tic, industrial,  commercial,  and  other  personal  services,  which 
also  rank  as  wealth,1  a  variety  of  productive  processes  go  to  pre- 
pare them  and  to  place  them  at  the  disposal  of  consumers.  The 
processes  of  production  may  thus  be  classified  as  extractive, 
manufacturing,  artistic,  transport,  commercial,  professional, 
domestic.  Thus  it  is  seen  that  the  work  of  'distribution'  and 
'exchange,' z  sometimes  distinguished  from  the  work  of  pro- 
duction, is  here  included  in  that  category. 

1  Labour  employed  in  productive  work  of  industry  is  usually  excluded  from  the 
category  of  national  'wealth',  though  it  is  sometimes  regarded  as  'personal  wealth'. 
But  there  is  no  sufficient  reason  for  this  exclusion.    Any  increase  of  the  efficiency  of 
the  labour  of  a  nation  is  evidently  as  much  an  increase  of  its  total  vendible  resources 
as  an  increase  in  its  instrumental  capital  would  be. 

2  Exchange  is  simply  an  ordinary  branch  of  production,  mainly  consisting  of 


4  WORK  AND  WEALTH 

Now,  the  first  difficulty  confronting  us  in  our  search  for  a 
human  valuation  of  this  economic  system  consists  in  the  ob- 
scurity in  which  half  this  system  lies.  For  though  there  is  every- 
where a  formal  recognition  that  consumption  is  the  end  or  goal 
of  industry,  there  is  no  admission  that  the  arts  of  consumption 
are  equally  important  with  the  arts  of  production  and  are  de- 
serving of  as  much  attention  by  students  or  reformers  of  our 
*  economic  system.'  On  the  contrary,  so  absorbing  are  the  pro- 
ductive processes  in  their  claims  upon  the  physical  and  mental 
energies  of  mankind,  that  the  economic  system,  alike  for  prac- 
titioners and  theorists,  has  almost  come  to  be  identified  with 
these  processes.  This  depreciation  and  neglect  of  Consumption 
no  doubt  has  been  natural  enough.  So  much  more  conscious 
energy  of  thought  and  feeling,  and  so  much  more  expenditure  of 
time  and  effort  have  gone  into  the  discovery,  development  and 
practice  of  the  productive  arts.  Their  practice  has  involved  so 
much  more  publicity,  so  much  wider  and  more  varied  intercourse, 
and  therefore  so  much  more  organisation.  Consumption,  on  the 
other  hand,  has  been  so  much  more  passive  in  its  character,  so 
private  and  individual  in  the  acts  which  comprise  it,  so  Little 
associated  with  sequences  of  thought  or  purpose,  that  it  has 
hardly  come  to  be  regarded  as  an  art.  Hence,  even  in  the 
more  elaborate  civilisations  where  much  detailed  skill  and  at- 
tention are  devoted  to  the  use  and  enjoyment  of  goods  and 
services,  the  neglect  of  consumptive  processes  by  economic 
science  remains  almost  unimpaired.  The  arts  of  production 
remain  so  much  more  exacting  in  their  demands  upon  our 
attention. 

The  early  influence  of  this  dominance  of  the  productive  stand- 
point in  economic  science  has  had  effects  upon  the  terminology 
and  structure  of  that  science  which  are  serious  obstacles  to  the 
human  interpretation  of  industry.  Unconsciously,  but  consis- 
tently, the  early  structure  of  the  science  was  built  with  exclusive 
regard  to  the  industrial  or  productive  processes.  The  art  out  of 
which  the  science  grew  was  concerned  with  the  progress  of  agricul- 

wholesale  and  retail  trade.  Distribution  has,  of  course,  another  and  an  important 
economic  signification,  being  applied  to  the  laws  determining  the  apportionment 
of  the  product. 


ture,  manufacture,  and  commerce,  or  with  problems  of  money, 
taxation,  and  population,  regarded  mainly  or  wholly  from  the 
productive  standpoint.  The  underlying  assumption  everywhere 
was  the  question,  'How  will  this  or  that  policy  affect  the  quan- 
tity of  wealth  produced  in  the  country? '  always  with  an  impor- 
tant corollary  to  the  effect,  'How  will  it  affect  the  quantity  of 
wealth,  passing  as  rents,  profits,  interest,  or  wages  to  the  several 
classes  of  the  nation?'  But  nowhere  was  there  any  direct  con- 
sideration of  the  arts  of  consumption,  with  one  particularly 
instructive  exception.  The  only  bit  of  attention  paid  by  our 
early  classical  economists  to  processes  of  consumption  was  to 
distinguish  'productive'  from  'unproductive'  consumption, 
that  is,  to  suggest  a  valuation  of  consumption  based  entirely 
upon  its  subordination  to  future  purposes  of  production.  Their 
condemnation  of  luxurious  expenditure  and  waste,  alike  in  the 
wealthy  and  the  working-classes,  was  not  primarily  directed 
against  the  loss  of  real  enjoyment,  or  human  well-being,  or  the 
moral  degradation  involved  in  such  abuse  of  spending  power, 
but  against  the  damage  to  the  further  processes  of  making  wealth 
by  reducing  the  rate  of  saving  or  by  impairing  the  working 
efficiency  of  labour.  Though  occasional  considerations  of  a  more 
distinctively  humane  or  moral  character  entered  into  the  tirades 
against  luxury,  or  the  dietetic  advice  offered  by  these  economic 
teachers,  the  main  trend  of  their  reflections  on  the  use  of  wealth 
was  quite  evidently  dominated  by  considerations  of  increased 
production.  This  tendency  further  impressed  itself  upon  the 
central  concept  of  economic  science,  that  of  value,  which  was 
treated  by  these  early  makers  of  Political  Economy  exclusively 
from  the  productive  standpoint  of  'costs.'  When,  however,  later 
theorists,  beginning  with  Jevons  in  this  country,  sought  to  con- 
vert the  formal  goal  of  consumption  into  the  real  goal,  by  sub- 
stituting '  utility '  for  '  cost '  as  the  determinant  of  value,  it  might 
have  been  supposed  that  they  would  have  been  impelled,  passing 
through  the  gateway  of  utility  into  consumption,  to  open  up 
that  hitherto  neglected  country.  But  no  such  thing  has  happened. 
While  an  elaborate  division  of  intellectual  labour  has  been 
applied,  both  to  the  study  of  the  objective  structure  of  industry, 
and  to  the  psychology  of  the  various  agents  of  production,  no 


6  WORK  AND  WEALTH 

corresponding  studies  of  consumption  have  been  made.  When 
the  products  of  industry  pass  over  the  retail  counter,  economic 
science  almost  entirely  loses  count  of  them.  They  pass  from  sight 
into  the  mysterious  maw  of  'the  Consumer.'  It  has  never 
occurred  to  the  economist  that  it  is  just  as  important  to  have  a 
clear  and  close  knowledge  of  what  happens  to  products  when 
they  have  become  consumer's  goods,  as  it  is  to  trace  their  history 
in  the  productive  stages.  It  would,  of  course,  be  untrue  to  say 
that  modern  economists  completely  ignore  methods  and  motives 
of  consumption.  Their  studies  of  value  and  of  markets  compel 
them  to  direct  equal  attention  to  forces  regulating  Supply  and 
Demand,  and  many  of  them  assign  a  formal  superiority  to  the 
demand  for  final  commodities  which  issues  from  Consumers,  as 
the  regulator  of  the  whole  industrial  system.  But  while  this  has 
evoked  some  interesting  enquiries  into  quantities  and  modes  of 
consumption,  the  main  interest  of  these  enquiries  has  lain,  not 
in  the  light  they  shed  upon  the  use  and  enjoyment  got  from  con- 
sumption, but  in  the  effects  of  that  consumption  upon  demand 
as  a  factor  in  problems  of  price  and  of  production.  In  a  word, 
the  economic  arts  of  consumption  still  run  in  subordination  to 
the  arts  of  production,  and  the  very  nature  of  the  interest  taken 
in  them  attests  their  secondary  place.  Half  of  the  field  of  ec- 
onomic survey  important  from  the  standpoint  of  human  welfare 
thus  stands  unexplored  or  ill-explored. 

§  3.  A  necessary  result  of  this  identification  of  economic 
subject-matter  with  the  productive  apparatus,  has  been  to  im- 
pose upon  the  study  of  economics  a  distinctively  mechanical 
character.  The  network  of  businesses  and  trades  and  processes, 
which  constitutes  industry,  may  indeed,  by  an  interpretative 
effort  of  imagination,  be  resolved  into  the  myriads  of  thoughts, 
desires  and  relations  which  are  its  spiritual  texture.  Every 
business,  with  its  varied  machinery  and  plant,  its  buildings, 
materials,  etc.,  is  the  embodiment  of  conscious  human  effort, 
and  the  personnel  of  management  and  operatives  represent  a 
live  current  of  volition  and  intelligence,  directing  and  cooperating 
with  it.  A  business,  thus  regarded,  is  a  distinctively  spiritual 
fabric.  Nor  is  this  true  only  of  those  industries  employed  in 
fashioning  material  goods.  The  complicated  arrangements  of 


THE  HUMAN  STANDARD  OF  VALUE  7 

communications  and  of  commerce  with  their  ganglia  of  markets, 
by  which  goods  pass  from  one  process  to  another  and  are  gathered, 
sorted  and  distributed  in  regulated  channels  throughout  the 
world  of  workers  and  consumers,  represent  an  even  more  delicate 
adjustment  of  psychical  activities.  Economic  science  tends,  un- 
doubtedly, to  become  less  material  in  its  outlook  and  treatment, 
and  to  give  more  attention  to  the  psychological  supports  of  the 
industrial  system.  Not  only  have  we  many  special  studies  of 
such  economic  questions  as  saving  and  investment,  business 
administration  and  other  critical  operations  of  will  and  judgment, 
but  in  such  works  as  those  of  M.  Tarde  in  France,  and  Mr. 
Wicksteed  in  this  country,  we  find  attempts  at  a  systematic 
psychological  interpretation  of  industry.  Economics,  indeed, 
according  to  the  latter  writer,  is  a  branch  of  the  science  of  'pref- 
erences,' the  application  of  intelligent  human  volition  to  the 
satisfaction  of  economic  wants. 

And  yet  the  science  remains  distinctively  mechanical  and 
unfitted  for  the  performance  of  any  human  interpretation  of  in- 
dustry. This  is  due  to  the  failure  of  our  psychological  econ- 
omists to  tear  themselves  free  from  the  traditions  of  a  Political 
Economy  which  in  its  very  structure  has  made  man  subservient 
to  marketable  wealth.  The  accepted  conception  of  the  Art  of 
Political  Economy  is  that  it  is  directed  to  the  production  of 
wealth  whose  value  is  attested  by  the  purely  quantitative  cal- 
culus of  money,  and  the  Science  of  Political  Economy  is  virtually 
confined  to  discovering  and  formulating  the  laws  for  the  produc- 
tion of  such  wealth.  The  basic  concepts  of  Value,  Cost,  and 
Utility,  are  subjected  to  this  governing  presupposition.  Their 
primary  significance  is  a  monetary  one.  The  value  of  any  stock 
of  wealth  is  signified  in  money,  the  cost  of  its  production,  the 
utility  of  its  consumption,  are  registered  in  monetary  terms. 
The  psychological  researches  which  take  place  into  processes  of 
thought  and  desire  are  not  regarded  as  having  significance  on 
their  own  account,  but  merely  as  means  or  instruments  in  the 
working  of  industrial  processes.  The  study  of  motives,  interests, 
and  ideas  in  the  process  of  invention,  or  in  the  organisation  and 
operation  of  some  productive  work,  treats  these  thoughts  and 
feelings  not  in  their  full  bearing  upon  human  life,  its  progress  or 


8  WORK  AND  WEALTH 

happiness,  but  in  exclusive  relation  to  the  monetary  end  to  which 
they  are  directed. 

§  4.  It  is  no  concern  of  ours  to  criticise  this  attitude  in  the 
sense  of  condemnation.  But  it  is  important  to  realise  that  no 
progress  of  psychological  analysis  will  enable  economic  science  to 
supply  a  human  valuation  of  industry  so  long  as  all  the  human 
functions  involved  in  economic  processes  are  measured,  assessed, 
and  valued,  according  to  their  bearing  upon  the  production  of  a 
'wealth'  which  has  no  directly  assignable  relation  to  human 
welfare,  but  is  estimated  by  a  purely  monetary  measure.  The 
net  effect  of  this  conception  of  the  economic  system  as  an  elab- 
orate arrangement  of  material  and  spiritual  factors,  contributing 
to  the  production  and  distribution  of  a  stream  of  various  goods 
valued  by  a  monetary  standard,  is  to  leave  upon  the  mind  the 
impress  of  a  distinctively  mechanical  apparatus.  No  one,  for 
example,  can  read  the  masterly  work  of  Mr.  Wicksteed l  without 
recognising  that  his  delicate,  elaborate  measurements  and  bal- 
ances of  motives  and  preferences,  while  involving  and  implying 
actions  that  no  one  but  man  can  perform,  treat  not  only  industry, 
but  humanity  itself  as  a  psychological  mechanism. 

This  distinctively  mechanical  character  is  inherent  in  the  struc- 
ture of  an  economic  science  based  upon  the  subserviency  of  all 
human  activities  to  a  purely  quantitative  conception  of  wealth, 
and  a  purely  monetary  standard  of  value.  This  character  of 
economic  science  is,  of  course,  by  no  means  disabling  for  all  pur- 
poses. On  the  contrary,  it  furnishes  valid  instruments  for  the 
interpretation  of  many  important  groups  of  phenomena  in  the 
business  world,  and  for  the  solution  of  certain  problems  where 
purely  quantitative  standards  and  methods  are  applicable. 
Indeed,  the  increasing  devotion  of  economists  to  problems  of 
money,  price,  and  other  definitely  monetary  questions,  may  be 
taken  as  a  half-instinctive  recognition  of  the  real  inadequacy 
of  current  economics  for  any  very  useful  solution  of  those  more 
vital  problems  into  which  closely  human  considerations  enter  as 
governing  factors.  As  we  proceed,  we  shall  realise  in  more  detail 
the  nature  of  the  incapacity  of  current  economics  to  furnish  any 
rules  for  settling  issues  that  relate  to  wages,  hours  of  labour, 
1  The  Common-sense  of  Political  Economy. 


THE  HUMAN  STANDARD  OF  VALUE  9 

State  interference  with  private  industry,  private  property,  and 
other  human  problems  which  are  in  first  appearance  'economic.* 

Three  defects  appear,  then,  to  disqualify  current  economic 
science  for  the  work  of  human  valuation.  First,  an  exaggerated 
stress  upon  production,  reflected  in  the  terminology  and  method 
of  the  science,  with  a  corresponding  neglect  of  consumption. 
Secondly,  a  standard  of  values  which  has  no  consistent  relation 
to  human  welfare.  Thirdly,  a  mechanical  conception  of  the 
economic  system,  due  to  the  treatment  of  every  human  action  as 
a  means  to  the  production  of  non-humanly  valued  wealth. 

§  5.  These  warning-posts  may  help  us  to  discover  and  to  formu- 
late an  intellectual  procedure  more  suited  to  our  needs.  A  human 
valuation  of  industry  will  give  equal  attention  to  Production  and 
Consumption,  will  express  Cost  and  Utility  in  terms  of  human 
effort  and  satisfaction,  and  will  substitute  for  the  monetary 
standard  of  wealth  a  standard  of  human  well-being.  This  asser- 
tion of  vital  value  as  the  standard  and  criterion  is,  of  course,  no 
novelty.  It  has  underlain  all  the  more  comprehensive  criticisms 
of  orthodox  political  economy  by  moralists  and  social  reformers. 
By  far  the  most  brilliant  and  effective  of  these  criticisms,  that 
of  John  Ruskin,  was  expressly  formulated  in  terms  of  vital  value. 
The  defects  which  he  found  in  the  current  economic  science  were 
substantially  the  same  as  those  which  we  have  noted.  His  famous 
declaration  that  'There  is  no  wealth  but  life/  and  his  insistence 
that  all  concrete  wealth  or  money  income  must  be  estimated  in 
relation  to  the  vital  cost  of  its  production  and  the  vital  utility  of 
its  consumption,  is  the  evidently  accurate  standpoint  for  a  human 
valuation  of  industry.  This  vital  criterion  he  brought  to  bear 
with  great  skill,  alike  upon  the  processes  of  production  and  con- 
sumption, disclosing  the  immense  discrepancies  between  mone- 
tary costs  and  human  costs,  monetary  wealth  and  vital  wealth. 
No  one  ever  had  a  more  vivid  and  comprehensive  view  of  the 
essentially  organic  nature  of  the  harmony  of  various  productive 
activities  needed  for  a  wholesome  life,  and  of  the  related  harmony 
of  uses  and  satisfactions  on  the  consumptive  side.  His  mind 
seized  with  incomparable  force  of  vision  the  cardinal  truth  of 
human  economics,  viz.  that  every  piece  of  concrete  wealth  must 
be  valued  in  terms  of  the  vital  costs  of  its  production  and  the 


io  WORK  AND  WEALTH 

vital  uses  of  its  consumption,  and  his  most  effective  assault  upon 
current  economic  theory  was  based  upon  its  complete  inadequacy 
to  afford  such  information.  But,  though  most  of  his  later  writings 
were  suffused  with  this  conception  of  wealth  and  with  the  double 
process  of  analysis  which  it  involved,  nowhere  was  that  analysis 
systematically  applied.  There  were  brilliant  excursions  into  the 
domain  of  labour,  distinguishing  the  nobler  and  the  baser  sorts, 
those  which  are  truly  'recreative'  and  those  which  degrade  and 
impoverish  life.  There  was  the  famous  distinction  between 
'wealth'  and  'illth,'  according  to  the  essential  qualities  of  the 
goods  and  the  sorts  of  persons  into  whose  hands  they  pass  for 
consumption.  In  the  most  systematic  of  his  works,  Munera 
Puheris,  he,  indeed,  appears  at  the  outset  to  have  his  mind 
closely  set  upon  the  exact  performance  of  the  required  analysis. 
For,  defining  the  scope  of  his  work,  he  says,  '  The  essential  work 
of  the  political  economist  is  to  determine  what  are  in  reality  use- 
ful or  life-giving  things,  and  by  what  degrees  and  kind  of  labour 
they  are  attainable  and  distributable.' *  Then  follows  a  clear 
and  logical  distinction  between  value  and  cost.  'Value  is  the 
life-giving  power  of  anything;  cost  the  quantity  of  labour  re- 
quired to  produce  it.'  Had  he  proceeded  to  estimate  'Wealth' 
with  equal  regard  to  its  value  and  its  labour-cost,  the  latter  ex- 
pressed in  vital  terms,  the  scientific  character  of  his  analysis 
would  have  been  preserved.  But  unfortunately  he  allowed  him- 
self to  be  overweighted  by  a  sense  of  value  which  stresses  '  human 
utility'  of  consumption,  so  that,  while  the  'utility'  side  of  the 
equation  is  worked  out  with  admirable  skill,  the  'cost'  or  labour 
side  is  slighted,  and  the  organic  relation  between  the  two  is  lost 
sight  of.  The  confusion  wrought  in  the  minds  of  readers  by  the 
failure  to  find  in  any  of  his  works  a  full  application  of  his  prin- 
ciple has  been  responsible  for  an  unjust  disparagement  of  the 
truly  scientific  service  rendered  by  Ruskin  towards  the  founda- 
tion of  social-economics.  From  a  Pisgah  height  his  mind's  eye 
swept  in  quick  penetrative  glances  over  the  promised  land,  but 
he  did  not  occupy  it,  or  furnish  any  clear  survey. 

§  6.  Our  purpose  here  is  in  part  to  perform  the  task  indicated 
by  Ruskin,  viz.  to  apply  to  industry  the  vital  standard  of  valua- 
1  Munera  Puheris,  §  XL. 


THE  HUMAN  STANDARD  OF  VALUE  n 

tion,  or  at  any  rate  to  improve  the  instruments  of  vital  survey. 
But  only,  in  part.  For  our  task  is  in  scope  less  comprehensive 
than  that  to  which  Ruskin  applied  himself.  Though  his  teaching 
sprang  originally  from  two  related  roots  of  emotional  valuation 
distinctively  economic  in  their  bearings,  the  love  of  the  finer  sorts 
of  human  work  called  Art,  and  the  reprobation  of  the  degrading 
conditions  of  the  work  most  of  his  countrymen  were  called  upon 
to  do,  it  expanded  into  a  wider  meaning  of  'economy'  which 
included  not  merely  economic  activities  and  economic  goods,  but 
all  sorts  of  vital  activities  and  goods.  A  criticism  of  current 
Political  Economy,  on  the  ground  that  it  did  not  treat  its  ac- 
cepted subject-matter  in  a  vital  manner,  thus  developed  into  a 
constructive  Political  Economy  which  not  merely  humanised  the 
method  but  expanded  the  area  of  the  science  and  art,  so  as  to 
make  it  in  effect  a  comprehensive  science  and  art  of  human  wel- 
fare. 

Now  it  has  always  been  an  open  question  whether  the  makers 
of  Political  Economy  were  intellectually  justified  in  severing 
marketable  from  non-marketable  goods  and  services,  and  framing 
a  separate  science  upon  studies  of  the  former.  That  marketable 
goods  are  not  always  separable  from  non-marketable,  and  that 
the  economic  activities  of  man  are  always  inter-related  with 
non-economic  activities,  are  accepted  truths.  Ruskin's  percep- 
tion of  the  intimacy  of  these  relations  between  commercial  and 
non-commercial  functions  and  products  led  him  to  break  down 
the  barriers  set  up  by  Economic  Science,  in  the  furtherance  of 
an  art  which  should  set  up  as  its  goal  'the  multiplication  of 
human  life  at  its  highest  standard.' 

Now  this  enlargement  may  be  quite  legitimate.  But  it  was 
evidently  responsible  in  large  measure  for  the  failure  of  Ruskin 
to  drive  home  the  criticism  directed  against  the  current  economic 
teaching.  It  was  one  thing  to  attack  Political  Economists  for 
failing  to  take  due  account  of  human  values  in  their  treatment  of 
processes  relating  to  marketable  wealth.  It  was,  however,  quite 
another  to  insist  that  the  barrier  between  Political  Economy  and 
other  social  sciences  and  arts  should  be  torn  down,  and  that  all 
phenomena  of  vital  import  should  become  the  objects  of  its  study. 
Had  Ruskin  been  able  to  keep  to  the  narrower  scope,  doubtless 


12  WORK  AND  WEALTH 

he  would  not  have  been  Ruskin,  but  his  attack  on  current  ec- 
onomic theory  and  practice  would  have  been  vastly  more  effect- 
ive. 

This  brief  excursion  into  Ruskin's  work  has  been  necessary, 
first  in  order  to  make  proper  acknowledgement  of  the  sound 
scientific  instinct  of  this  great  pioneer  of  social  thought,  and, 
secondly,  to  make  it  clear  that,  while  accepting  his  standard  of 
valuation,  we  do  not  propose  applying  it  outside  the  range  of 
economic  phenomena  in  the  ordinary  acceptation  of  that  term. 
While  admitting  the  overlapping  and  interaction  of  economic  and 
other  human  functions,  we  shall  accept  the  ordinary  definition  of 
the  boundaries  of  economic  studies,  and  shall  seek  to  make  our 
human  survey  and  apply  our  human  valuation  within  these 
limits.  The  extra-economic  implications  which  the  unity  of  life 
will  disclose  cannot,  indeed,  be  ignored,  but  they  will  be  treated 
as  supplementary  to  the  main  purpose,  that  of  valuing  the  proc- 
esses directly  connected  with  the  getting  and  spending  of  money 
incomes. 

§  7.  In  setting  up  a  vital  standard  of  valuation,  we  are  likely 
to  be  met  with  the  objections  that  life  is  too  vague,  too  changing, 
too  incomprehensible  for  any  standard,  and  that  life  is  not 
valuable  in  itself  but  because  of  certain  qualities  which  it  may 
possess.  Our  standard  must  be  conceived  in  terms  of  a  life  that 
is  good  or  desirable.  This  consideration  might  evidently  lead 
us  far  afield.  If  we  are  to  undertake  a  valuation  of  life  as  a  pre- 
liminary to  valuing  industry,  it  is  likely  that  we  may  never 
approach  the  second  undertaking.  The  best  escape  from  this 
predicament  is  to  start  from  some  generally  accepted  concept 
which  indicates,  even  if  it  does  not  express  fully,  the  desirable  in 
life.  Such  a  term  I  take  to  be 'organic  welfare.'  Though  in  form 
a  mere  synonym  for  good  life,  it  is  by  usage  both  more  restricted 
and  more  precise.  It  perhaps  appears  to  thrust  into  the  forefront 
of  consideration  the  physical  basis  of  life.  But  the  organic  con- 
cept, when  liberally  interpreted  and  applied,  carries  no  such 
restrictive  implication,  and  its  distinctively  biological  association 
should  not  rule  it  out  from  the  work  of  wider  valuation  here 
required.  As  a  provisional  statement  of  our  standard  of  valua- 
tion, 'organic  welfare'  has  two  advantages.  In  the  first  place, 


THE  HUMAN  STANDARD  OF  VALUE  13 

it  supplies  an  admittedly  sound  method  of  estimating  those 
physical  costs  and  utilities  with  which  the  major  part  of  industry 
and  of  its  product  is  associated.  Even  in  the  most  advanced 
civilisation  of  to-day,  economic  processes  are  primarily  physical 
in  the  efforts  they  evoke  and  in  the  needs  they  satisfy;  the  ex- 
penditure and  recoupment  of  physical  energy  constitute  the  first 
and  most  prominent  aspect  of  industry.  In  tracing  the  origins 
of  human  industry,  we  shall  find  this  rooted  in  what  appear  as 
half -instinctive  animal  functions  for  the  satisfaction  of  'organic' 
needs,  individual  or  racial.  The  primitive  direction  of  produc- 
tive effort  is  evidently  'organic.' 

Again,  the  'organic'  point  of  view  avoids  two  grave  errors 
common  to  the  more  mechanical  treatment  of  an  economic 
science  which  has  subordinated  man  to  commercial  wealth.  It 
insists  upon  regarding  the  productive  effort  which  goes  into  any 
work  of  production  and  the  satisfaction  which  proceeds  from  the 
consumption  of  any  product,  not  as  a  separate  cost  and  a  separate 
utility,  but  in  their  total  bearing  upon  the  life  of  the  producer  or 
consumer.  The  mechanical  separatism  of  the  ordinary  economic 
view  follows  from  a  treatment  in  which  the  labour  bestowed  on  a 
product  is  only  a  'cost'  in  the  same  sense  as  the  raw  materials 
and  tools  employed  in  making  it,  all  alike  purchased  as  separate 
commodities  at  a  market  in  which  they  figure  as  fractions  of  a 
Supply.  Similarly  with  the  ordinary  economic  treatment  of  con- 
sumption. Each  consumable  is  regarded  as  yielding  a  quality  of 
utility  or  satisfaction  valued  on  its  own  account,  whereas  in  real- 
ity its  consumable  value  depends  upon  the  ways  hi  which  it  affects 
the  entire  organic  process  of  consumption.  Every  speeding-up 
of  a  machine-process,  or  every  reduction  of  the  hours  of  labour, 
affects  for  good  or  evil  both  the  economic  and  the  human  effi- 
ciency of  the  whole  man:  every  rise  or  fall  of  remuneration  for 
,  his  labour  similarly  reacts  upon  the  standard  of  life.  Nor  is  this 
all.  Current  economic  science  has  not  only  treated  each  cost  and 
each  utility  as  a  separate  item  or  unit  of  economic  power,  it  has 
treated  each  man  as  two  men,  producer  and  consumer.  The 
acquiescence  in  the  economic  tendency  towards  a  constantly  in- 
creasing specialisation  of  man  as  producer,  a  constantly  increasing 
generalisation  of  man  as  consumer,  is  only  intelligible  upon  the 


14  WORK  AND  WEALTH 

supposition  that  the  arts  of  production  and  consumption  have 
no  relation  to  one  another.1  The  standpoint  of  organic  welfare 
reduces  to  its  natural  limits  this  useful  distinction  of  producer 
and  consumer,  and  enables  us  to  trace  the  true  interactions  of  the 
two  processes.  In  a  word,  it  obliges  us  to  value  every  act  of  pro- 
duction or  consumption  with  regard  to  its  aggregate  effect  upon 
the  life  and  character  of  the  agent. 

§  8.  Finally,  a  'social'  interpretation  of  industry  is  not  pos- 
sible except  by  treating  society  as  an  organic  structure.  Whether 
society  be  regarded  as  an  'organism'  with  a  life  conceived  as 
comprising  and  regulating  the  life  of  its  individuals,  in  the  same 
manner  as  a  biological  organism  that  of  its  cells,  or  as  an  'organi- 
sation' contrived  by  individuals  entirely  for  the  furtherance  of 
their  private  ends,  it  must  be  treated  as  a  vital  structure  capable 
of  working  well  or  working  ill.  I  say  vital  structure,  not  spiritual 
structure,  for  I  hold  the  tendency  to  interpret  social  organisation 
exclusively  in  terms  of  ethical  ends,  and  as  existing  simply  for 
'the  realisation  of  an  ethical  order,'  to  be  unwarranted.  The 
men  who  form  or  constitute  a  Society,  or  who  enter  any  sort  of 
social  organisation,  enter  body  and  soul,  they  carry  into  it  the 
inseparable  character  of  the  organic  life,  with  all  the  physical  and 
spiritual  activities  and  purposes  it  contains.  Particular  modes 
of  social  organisation,  as,  for  example,  a  Church,  may  be  treated 
as  directed  primarily  to  spiritual  ends,  though  even  there  the 
separation  is  not  finally  valid.  But  society  in  the  broader  sense, 
even  though  conceived  not  as  an  'organism'  but  merely  as  an 
organisation,  must  be  regarded  as  existing  for  various  sorts  of 
human  purposes.  For  the  impulses  to  form  societies  are  rooted 
in  broad  instincts  of  gregariousness  and  of  sexual  and  racial 
feeling,  which  are  best  described  as  organic,  and,  though  these 
instincts  become  spiritualised  and  rationalised  with  the  progress 
of  the  human  mind,  they  never  cease  to  carry  a  biological  import. 

Even  though  one  takes,  therefore,  the  extremely  individualistic 
view  of  Society,  regarding  it  as  nothing  more  than  a  set  of  arrange- 
ments for  furthering  the  life  of  individual  men  and  women, 

1  How  potent  a  source  of  intellectual  confusion  this  separation  of  producer  and 
consumer  is,  may  be  best  illustrated  from  the  commonly  accepted  treatment  of  the 
theory  of  taxation,  which  regards  'consumers'  as  a  different  class  of  beings  from 
'producers '  for  purposes  of  incidence  of  taxes. 


THE  HUMAN  STANDARD  OF  VALUE  15 

entirely  a  means  or  instrument  for  achieving  the  ends  of  'per- 
sonality,' our  human  valuation  of  industry  will  require  considera- 
tion of  its  reactions  upon  the  structure  and  working  of  these 
social  arrangements. 

But  this  organic  treatment  of  Society  is,  of  course,  still  more 
essential,  if  we  consider  society  not  merely  as  a  number  of  men 
and  women  with  social  instincts  and  social  aspects  of  their  in- 
dividual lives,  but  as  a  group-life  with  a  collective  body,  a 
collective  consciousness  and  will,  and  capable  of  realising  a 
collective  vital  end.  The  disposition  to  convert  sociology  into 
a  study,  on  the  one  hand,  of  social  feelings  in  the  individual  man, 
on  the  other  of  social  institutions  that  are  only  forms  through 
which  these  feelings  express  themselves,  is  to  my  mind  a  wholly 
inadequate  conception  of  the  science  of  Society.  The  study  of 
the  social  value  of  individual  men  no  more  constitutes  sociology 
than  the  study  of  cell  life  constitutes  human  physiology.  A 
recognition  of  the  independent  value  of  the  good  life  of  a  society 
is  essential  to  any  science  or  art  of  Society. 

To  a  Greek  or  a  Roman,  the  idea  that  the  city  existed  merely 
for  the  production  of  good  citizens,  and  without  an  end  or  self 
of  its  own,  would  never  have  seemed  plausible.  Nor  to  any 
Christian,  familiar  with  the  idea  and  the  sentiment  of  the  Church 
as  a  society  of  religious  men  and  women,  would  it  occur  that  such 
Society  had  no  life  or  purpose  other  than  that  contained  in  its 
individual  members.  Society  must  then  be  conceived,  not  as  a 
set  of  social  relations,  but  as  a  collective  organism,  with  life,  will, 
purpose,  meaning  of  its  own,  as  distinguished  from  the  life,  will, 
purpose,  meaning,  of  the  individual  members  of  it.  To  those  who 
boggle  at  the  extension  of  the  biological  term  'organism'  to 
society,  asking  awkward  questions  as  to  the  whereabouts  of  the 
social  sensorium,  and  the  integument  of  a  society,  or  whether  a 
political,  a  religious,  an  industrial  Society  do  not  conflict  and 
overlap,  I  would  reply  that  these  difficulties  are  such  as  arise 
whenever  an  extension  of  boundaries  occurs  in  the  intellectual 
world.  The  concept  'organism'  as  applied  to  the  life  of  animals 
and  vegetables,  is  not  wholly  appropriate  to  describe  the  life  of  a 
society,  but  it  is  more  appropriate  than  any  other  concept,  and 
some  concept  must  be  applied.  If  some  qualification  is  desired, 


16  WORK  AND  WEALTH 

no  objection  can  be  raised  against  the  term  super-organism  ex- 
cept its  length.  What  is  necessary  is  that  some  term  should  be 
used  to  assist  the  mind  in  realising  clearly  that  all  life  proceeds 
by  the  cooperation  of  units  working,  not  each  for  its  separate 
self,  but  for  a  whole,  and  attaining  their  separate  well-being  in 
the  proper  functioning  of  that  whole.  As  the  structure  of  the 
organic  cell,  the  organ,  and  the  organism  illustrate  this  coopera- 
tive and  composite  life,  so  with  the  larger  groupings  which  we 
call  societies.  An  animal  organism  is  a  society  of  cells. 

§  9.  So  far  as  the  difficulty  arising  from  the  narrowly  biological 
use  of  the  term  organism  is  concerned,  that  is  rapidly  disappear- 
ing before  the  advance  of  psychology.  For  modern  biology  is 
coming  more  and  more  to  realise  its  early  error  in  seeking  to  con- 
fine itself  to  the  study  of  life  as  a  merely  physical  phenomenon. 
Biology  and  psychology  are  constantly  drawing  into  closer  rela- 
tions, with  the  result  that  a  new  science  of  psycho-biology  is 
already  coming  into  being.  In  building,  thus  far,  upon  a  founda- 
tion of  organic  concepts,  one  is  no  longer  properly  exposed  to  the 
suspicion  of  ignoring  or  disparaging  the  psychical  phenomena 
which  constitute  man's  spiritual  nature. 

As  biology,  thus  treating  the  entire  organic  nature  of  man, 
becomes  an  individual  psycho-physics,  so  must  sociology,  treating 
the  wider  organic  nature  of  man,  become  a  collective  psycho- 
physics.  While  then  the  respective  importance  of  the  welfare 
of  the  individual  and  of  society  may  still  be  difficult  to  define, 
the  admission  of  society  as  a  psycho-physical  structure,  with 
human  ends  of  its  own,  will  involve  its  proper  recognition  in  the 
appraisement  of  every  sort  of  human  value.  Our  task,  that  of 
devising  a  method  of  valuation  of  industry,  will  evidently  demand 
that  economic  processes  shall  be  considered,  not  only  in  their 
bearing  upon  individual  lives,  but  in  their  bearing  upon  the  wel- 
fare of  society.  Indeed,  it  is  difficult  to  see  how  any  reasonable 
person  can  confront  the  grave  practical  problems  presented  by  the 
industrial  societies  of  to-day,  such  as  those  contained  in  individ- 
ual, class,  sex,  national  differentiation  of  economic  functions, 
without  realising  that  the  hypothesis  of  humanity  as  itself  a 
collective  organism  can  alone  furnish  any  hope  of  their  rational 
solution. 


THE  HUMAN  STANDARD  OF  VALUE  17 

The  significance  of  the  organic  conception  'in  any  human 
valuation  of  industrial  acts  or  products  is  evident.  It  requires 
us  to  value  each  act  or  product  both  from  the  standpoint  of  the 
individual  and  of  the  society  to  which  he  belongs,  and  it  fur- 
nishes a  harmony  of  the  two  areas  of  interest.  The  baffling 
problems  everywhere  presented  to  thought  by  the  apparent 
contradiction  of  the  unity  and  the  diversity  of  nature,  the  whole 
and  the  parts,  the  general  and  the  particular,  find  their  clearest 
practical  solution  in  the  fact  and  consciousness  of  man's  social  na- 
ture, his  recognition  that  in  feeling  and  in  action  he  is  both  an 
individual  and  a  member  of  a  number  of  social  groups,  expanding 
in  a  series  of  concentric  circles  from  family  and  city  to  humanity, 
and  in  dimmer  outline  to  some  larger  cosmic  organism. 

For  our  economic  valuation,  the  harmony  of  this  narrower 
and  wider  treatment  of  human  nature  is  of  profound  and  obvious 
importance.  It  will  require  us,  in  considering  the  vital  costs  and 
satisfactions  involved  in  the  production  and  consumption  of 
goods,  to  have  regard  to  their  effects,  not  only  upon  the  individ- 
uals who  produce  and  consume  the  goods,  but  upon  the  city, 
nation,  or  other  society  to  which  they  belong.  Human  welfare 
will  be  not  merely  the  welfare  of  human  beings  taken  as  an  ag- 
gregate, but  of  society  regarded  as  an  organic  unity.  The  most 
delicate  economic  and  spiritual  issues  of  adjustment  will  be  found 
to  relate  to  the  provisions  for  harmonising  the  order  and  the 
growth  of  the  narrower  and  the  wider  organisms.  While,  then, 
biology  has  in  the  past  been  too  arrogant  in  pressing  distinctively 
physical  implications  of  the  term  'organism'  into  the  dawning 
science  of  sociology,  and  in  distorting  the  true  conception  of  social 
evolution  by  enforcing  narrow  interpretations  of  selection  and 
survival,  this  is  no  ground  for  refusing  to  utilise  the  terminology 
which,  better  than  any  other,  expresses  the  relations  of  parts  to 
wholes  in  every  sort  of  living  substance. 

The  contradictions  of  Production  and  Consumption,  Cost  and 
Utility,  Physical  and  Spiritual  Welfare,  Individual  and  Social 
Welfare,  all  find  their  likeliest  mode  of  reconcilement  and  of 
harmony  in  the  treatment  of  society  as  an  organism. 

NOTE.  There  are  doubtless  those  who  will  remain  dissatisfied  with  this  insistence 
upon  the  extension  of  organism  and  the  conception  of  the  humanly  desirable  in 


i8  WORK  AND  WEALTH 

terms  of  'organic'  welfare.  They  would  insist  that  the  conscious  personality  of  an 
individual  or  of  a  society  transcends  organism,  as  the  latter  does  mechanism,  and 
that  our  standard  and  measure  of  welfare  should  be  expressed  in  psychical  terms  of 
personality.  This  point  of  view  has  recently  been  concisely  and  powerfully  restated 
by  Dr.  Haldane  (Mechanism,  Life  and  Personality).  But  though  there  is  much 
to  say  for  treating  personality  as  the  intrinsic  quality  of  our  humanist  standard, 
I  decided  against  the  course  on  a  balance  of  intellectual  expediency,  preferring  to 
retain  the  clearness  and  force  of  the  organic  concept  while  spiritualising  it  to 
meet  the  requirements  of  ascending  life. 


CHAPTER  H 

THE  HUMAN  ORIGINS   OF  INDUSTRY 

§  i.  Although  it  is  no  part  of  my  purpose  to  endeavour  to  set 
forth  the  facts  and  laws  of  the  historical  evolution  of  modern 
industry,  it  will  be  useful  to  make  some  brief  allusion  to  the  ori- 
gins of  industry  and  property,  so  as  to  give  concrete  meaning 
to  the  stress  laid  upon  organic  processes  in  our  interpretation. 
For  just  in  proportion  as.  it  is  realised  that  industry  has  all  its 
earliest  roots  in  the  primary  organic  needs  of  man,  will  assent 
more  easily  be  given  to  the  proposal  to  adhere  to  the  organic 
conception  of  welfare  in  valuing  modern  economic  processes. 

It  is  not  easy  to  ascertain  where  the  activities  which  we  term 
industrial  first  emerge  in  the  evolution  of  organic  life.  Every 
organism  selects,  appropriates,  and  assimilates  matter  from  its 
environment,  in  order  to  provide  for  growth  or  waste  of  tissue 
and  energy  given  out  in  the  general  course  of  its  vital  processes, 
including  the  activities  of  procuring  food,  protection  against 
organic  or  inorganic  dangers,  and  the  generation,  rearing,  and 
protection  of  offspring.  Nutrition  and  function  are  the  terms 
usually  applied  to  describe  the  primary  balance  of  the  vital 
processes  of  intaking  and  outputting  energy.  The  organism 
feeds  itself  in  order  to  work.  It  seems  at  first  as  if  we  had  here 
laid  down  in  the  origins  of  organic  life  a  natural  economy  of 
production  and  consumption.  But  do  the  organic  processes  of 
feeding,  choosing,  appropriating,  and  assimilating  food,  constitute 
consumption,  and  do  the  other  activities  for  which  food  is  utilised 
constitute  production?  Reflection  will  show  that  there  is  very 
little  intellectual  service  in  pressing  sharply  this  distinction. 
The  active  life  of  an  organism  consists  in  a  round  of  nutritive, 
protective,  generative  processes,  each  of  which,  from  the  stand- 
point of  individual  and  species,  may  be  regarded  alike  as  produc- 
tive and  consumptive.  A  plant  drives  its  suckers  into  the  soil  in 
search  of  the  foods  it  needs,  disposes  its  leaves  to  utilise  the  light 

19 


20  WORK  AND  WEALTH 

and  air  or  for  protection  against  the  wind,  assimilates  its  organic 
food  by  the  use  of  its  stock  of  chlorophyl,  distributes  it  through- 
out its  system  for  maintenance  and  growth,  and  directs  that 
growth  so  as  to  safeguard  its  own  existence  and  to  provide  itself 
with  favourable  opportunities  of  fertilisation  by  insect  or  other 
agencies.  If  due  account  be  taken  both  of  the  cellular  life  within 
the  individual  and  of  the  specific  life  of  this  plant  organism,  the 
whole  of  the  processes  or  activities  appears  to  be  nutritive,  each 
act  of  nutrition  being  associated  with  some  other  function  in  the 
evolution  of  the  cell,  the  organism,  the  species.  It  would  be  as 
plausible  to  assert  that  every  other  function,  protective,  genera- 
tive, or  other,  was  undertaken  for  the  nutrition  of  the  individual 
or  the  species,  as  to  assert  the  opposite.  But,  without  entering 
into  the  delicate  metaphysics  of  this  question,  we  may  confidently 
affirm  that  in  this  elementary  organic  life  nutrition  and  function 
cannot  be  regarded  as  mutually  exclusive  processes,  while  the  eco- 
nomic contrasts  of  production  and  consumption,  work  and  enjoy- 
ment, cost  and  utility,  have  no  clear  application.  If  we  approach 
a  stage  nearer  to  human  life,  we  begin  to  find,  in  the  life  of  either 
the  lower  or  higher  animals,  some  organic  activities  to  which  the 
term  industry  appears  applicable.  The  long,  arduous,  complex 
and  painful  output  of  energy,  consciously  put  forth  by  many  ani- 
mals in  the  search  for  food,  sometimes  in  the  storage  of  food,  in 
the  provision  of  shelter,  in  some  instances  in  the  use  of  tools  or 
weapons,  in  processes  of  cooperation  and  division  of  labour  for 
migration,  protection,  or  combat,  certainly  approaches  what  we 
recognise  as  industry.  It  involves  a  painstaking  interference 
with  the  material  environment  for  the  purposive  attainment  of 
some  distinct  object  consciously  regarded  as  desirable,  which  is 
of  the  essence  of  industry.  It  may,  however,  be  objected  that 
such  processes,  though  resembling  human  industry  in  the  in- 
tricacy and  technical  skill  involved,  are  not  really  purposive  in 
the  rational  sense,  but  are  merely  instinctive,  and  that,  as  such, 
they  ought  to  be  distinguished  from  the  rational  conduct  of 
human  industry.  Thus,  it  is  contended  that,  though  the  efforts 
given  out  by  many  animals  in  procuring  food,  protection  against 
enemies,  or  provision  of  shelter,  formally  correspond  with  familiar 
processes  of  human  industry,  the  direction  of  instinct  makes 


THE  HUMAN  ORIGINS  OF  INDUSTRY  21 

the  application  of  this  term  improper.  But,  as  we  proceed  further 
into  our  psychological  analysis  of  human  work,  we  shall  find  so 
large  an  element  of  admitted  instinct  in  many  forms  of  it  as  to 
preclude  us  from  admitting  that  'rational'  direction  is  essential 
to  industry.  It  is,  therefore,  permissible  for  us  to  give  a  provi- 
sional recognition  to  such  animal  activities  as  containing  some, 
at  any  rate,  of  the  essential  characteristics  of  'work'  or  'industry.' 
Indeed,  the  evident  resemblance  of  these  regular  activities  of 
animals  in  seeking  food,  shelter  and  protection,  to  the  activities 
of  primitive  man  applied  to  the  same  definitely  organic  satisfac- 
tions, would  preclude  us  from  denying  to  the  lower  animals  what 
we  must  admit  in  the  case  of  men.  For,  even  in  primitive  men, 
possessing  a  certain  use  of  tools  and  weapons,  and  a  higher  degree 
of  cunning  in  dealing  with  their  environment,  the  drive  and 
direction  of  organic  instincts  and  impulses,  as  distinguished 
from  reflection  and  reason,  appear  to  be  hardly  less  dominant 
than  in  their  animal  kindred.  Unless  we  arbitrarily  reserve  the 
concepts  work  and  industry  for  a  higher  stage  of  social  evolution, 
in  which  some  measure  of  settled  life  with  tribal  and  personal 
property  and  calculated  provision  for  future  wants  have  emerged, 
it  will  be  well  to  seek  the  roots  of  the  elaborated  industrial  system 
which  we  wish  to  interpret  in  these  rudimentary  and  mainly 
instinctive  activities  of  animals  and  savage  men. 

§  2.  In  examining  these  organic  activities  lying  at  the  basis 
of  human  industry,  we  shall  light  at  the  outset  upon  one  fact 
of  extreme  significance,  viz.  that  to  each  of  these  organically 
useful  efforts  Nature  has  attached  some  definite  physical,  or 
psycho-physical,  enjoyment.  Hunting,  fighting,  mating,  the  care 
and  protection  of  the  young,  indeed  all  actions  which  possess 
what  is  called  'survival  value'  or  biological  utility,  are  endowed 
with  a  pleasure  bonus  as  a  bribe  for  their  performance.  Nature 
endows  most  organically  useful  efforts  with  concurrent  enjoy- 
ment. 

But,  though  in  these  'organic  functions*  many  animals  give 
out  a  great  deal  of  'laborious'  effort,  commingled  with  elements 
of  play  or  of  incipient  art,  as  in  the  dancing,  singing  and  decora- 
tive operations  of  birds,  to  none  of  them  is  the  word  'industry' 
fully  applicable.  We  do  not  seem  to  enter  the  definitely  economic 


22  WORK  AND  WEALTH 

sphere  until  we  find  animals  sufficiently  reasonable  to  interfere 
in  a  conscious  way  with  their  environment,  for  tolerably  distant 
ends.  For,  though  much  industrial  production  and  consumption 
will  continue  to  be  either  instinctive  or  automatic  in  their 
operation,  a  growing  element  of  conscious  purpose  will  become 
essential  to  the  ordered  conduct  of  all  industrial  processes.  The 
conscious  conception  of  more  distant  ends  and  the  growing 
willingness  to  make  present  sacrifices  for  their  attainment  are 
the  plainest  badges  of  this  industrial  progress.  When  a  being  is 
aware  of  these  purposes  he  has  entered  a  rational  economy. 

As  this  more  rational  economy  proceeds,  the  marks  which 
distinguish  it  from  a  purely  instinctive  organic  economy  become 
evident.  The  instinctive  economy  allows  little  scope  for  in- 
dividuality of  life,  the  dominant  drive  of  its  'implicit'  purpose 
is  specific,  i.  e.  subserving  the  maintenance  and  evolution  of  the 
species.  The  spirit  of  the  hive  in  bee-life  is  the  fullest  expression 
of  this  subservience  of  the  individual  life  to  the  corporate  life 
and  of  the  present  generation  to  the  series  of  generations  consti- 
tuting the  specific  life.  But  everywhere  the  dominion  of  instinct 
implies  the  absorption  of  the  individual  life  in  promoting  the  ends 
of  the  species:  successful  parenthood  is  the  primary  work  of  the 
individual. 

It  might  almost  be  said  that  the  dawn  of  reason  is  the  dawn 
of  selfishness.  For  rational  economy  involves  a  conscious  realisa- 
tion of  the  individual  self,  with  ends  of  its  own  to  be  secured  and 
with  opportunities  for  securing  them.  The  earliest  conception 
of  this  separate  self  and  its  ends  will  naturally  tend  to  be  in 
terms  of  merely  or  mainly  physical  satisfaction.  Thus  the  dis- 
placement of  the  instinctive  by  the  rational  economy  is  evidently 
a  critical  era,  attended  with  grave  risks  due  to  the  tendency 
towards  an  over-assertion  of  the  individual  self  and  a  consequent 
weakening  of  the  forces  making  for  specific  life.  Man,  the  newly 
conscious  individual,  may  perversely  choose  to  squander  organic 
resources  '  intended '  by  nature  for  the  race  upon  his  own  personal 
pleasures  and  needs.  He  may  refuse  to  make  as  a  matter  of 
rational  choice  those  personal  efforts  and  sacrifices  for  family  and 
race  which  no  animal,  subject  to  the  drive  of  instinct,  is  able  to 
'think'  of  refusing.  Such  may  be  an  effect  of  the  release  from 


THE  HUMAN  ORIGINS  OF  INDUSTRY  23 

the  life  of  organic  instincts.  The  increasing  supply  of  foods  and 
other  sources  of  physical  satisfaction  he  may  apply  to  build  up 
for  himself  a  life  of  super-brutal  hedonism.1  For,  when  reason 
first  begins  to  assert  supremacy,  it  is  apt  to  become  thrall  to  the 
purely  animal  self.  Only  as  this  animal  self  becomes  spiritualised 
and  socialised,  does  the  social  race-life  reassert  its  sway  upon  the 
higher  plane  of  human  consciousness. 

§  3.  But  it  is  of  importance  to  realise  that  a  first  effect  of 
reason,  operating  to  direct  the  purposive  activities,  is  to  liberate 
the  'self  from  the  dominion  of  the  specific  life,  and  to  enable  it 
to  seek  and  obtain  separate  personal  satisfactions.  For  with 
this  power  comes  the  fact  and  the  sense  of  'personal  property' 
which  play  so  large  a  part  in  industry. 

Early  industry  and  early  property  are  largely  directed  by  the 
requirements  of  this  dawning  sense  of  personality.  Though  the 
origins  of  industry  are  doubtless  found  in  the  promptings  of 
organic  utility,  they  are  not  of  a  narrowly  'utilitarian'  character. 
We  do  not  find  the  earliest  industries  of  man  closely  confined  to 
the  satisfaction  of  what  might  seem  the  most  urgent  of  his  organic 
needs,  food,  shelter,  protection  against  enemies.  The  elements 
of  play  and  ornament  are  so  prevalent  in  early  industries  as  to 
suggest  the  theory,  which  some  anthropologists  press  far,  that 
adornment  for  personal  glory  is  the  dominant  origin  of  industry 
and  property.  So,  for  example,  Biicher 2  contends  that  the 
earliest  really  industrial  activities  were  a  painting  and  tatooing 
of  the  body,  and  a  manufacture  of  clothing  and  of  other  personal 
apparatus  for  purely  ornamental  purposes. 

Even  the  taming  of  domestic  animals  was,  he  held,  first  under- 
taken for  amusement  or  for  the  worship  of  the  gods.  The  strong 
attraction  of  most  savage  or  backward  peoples  in  our  day  towards 
articles  of  ornament  and  play  which  afford  expression  to  naive 
personal  pride,  appears  to  support  this  view.  Primitive  man  cer- 
tainly does  not  evolve  towards  industrial  civilisation  by  a  logi- 

1  'Em  wenig  besser  wtird  er  leben 

Hattst  du  ihm  nicht  den  Schein  des  Himmels  Licht  gegeben 
Er  nennt's  Vernunft  und  braucht's  allein 
Nur  thierischer  als  jedes  Thier  zu  sein.' 

*  Industrial  Evolution  (Bell  &  Co.). 


24  WORK  AND  WEALTH 

cally  sane  economy  of  satisfying  first  his  most  vitally  important 
material  needs,  and  then  building  on  this  foundation  a  superstruc- 
ture of  conveniences,  comforts  and  luxuries,  with  the  various  in- 
dustries appertaining  thereto.  This  economic  man  is  nowhere 
found.  Actual  man,  as  many  anthropologists  depict  him,  appears 
to  begin  with  the  luxuries  and  dispenses  with  the  conveniences. 
This  non-utilitarian  view  of  the  origins  of  industry  has,  how- 
ever, been  driven  to  excess.  There  remains  a  large  element  of 
truth  in  the  proverb  'Necessity  is  the  mother  of  invention.' 
The  earliest  weapons  and  tools,  adapted  from  sticks  and  stones 
and  other  raw  material,  were  probably  forced  on  the  dawning 
intelligence  of  man  by  the  hard  facts  of  his  struggle  with  hostile 
nature  and  his  search  for  food.  Fighting,  hunting,  mating,  were 
presumably  his  first  pursuits  and  the  early  arts  or  industries,  at 
any  rate  on  the  male  side,  would  be  subsidiary  to  these  pursuits. 
Any  organised  process  or  handling  of  matter  which  would  make 
him  a  better  fighter,  hunter,  suitor,  would  be  likely  to  emerge  as 
a  craft  or  industry.  This  explains  the  apparent  blend  of  utili- 
tarian and  non-utilitarian  origins.  In  point  of  fact,  most  of  the 
so-called  ornamental  activities  and  products  have  their  evident 
biological  uses.  They  are  not  mere  playthings.  The  adornment 
of  the  human  body,  the  use  of  tatoos  and  masks,  drums  and  gongs 
and  other  play-products,  are  partly,  no  doubt,  for  mere  glory  of 
self-assertion,  itself  an  instinctive  craving,  but  also  for  courtship, 
for  recognition  and  for  frightening  enemies.  While,  then,  it  re- 
mains true  that  the  sportive  and  artistic  impulses  are  conspicuous 
in  the  early  crafts,  it  is  a  mistake  to  disparage  the  organic  utility 
of  these  processes.  After  man  has  made  provision  for  the  present 
necessities  of  the  body,  his  superfluous  energy  naturally  tends, 
either  to  preparatory  play,  the  practice  or  imitation  of  biologically 
useful  actions,  or  else  to  explorative,  constructive,  and  decorative 
work  in  handling  such  materials  as  present  themselves.  This 
curiosity  about  his  surroundings,  and  the  instinctive  desire  to 
construct  and  arrange  them  for  his  convenience,  or  for  the  dawn- 
ing aesthetic  satisfaction  of  his  senses,  or  to  impress  the  female 
of  his  race,  these  instincts  undeniably  coalesce  with  the  drive  of 
physical  necessity  to  force  man  to  apply  his  mind  to  the  discovery 
and  practice  of  the  early  arts  and  crafts. 


THE  HUMAN  ORIGINS  OF  INDUSTRY  25 

But,  though  these  distinctively  male  modes  of  manipulating 
the  environment  thus  possess  a  utilitarian  aspect,  they  do  not 
furnish  the  beginnings  of  the  chief  industries  which  figure  in 
civilised  life.  The  beginnings  of  manufacture  and  of  agriculture, 
as  regular  occupations,  are  commonly  ascribed  to  women  and  to 
slaves.  Those  who  conceive  of  the  earliest  human  societies  as 
matriarchal  or  gyricecocentric,  the  women  forming  fixed  centres 
of  order  in  the  home  and  village,  owning  the  children  and  the 
property  attached  to  the  home,  regard  women  both  as  the  inven- 
tors and  the  practitioners  of  the  early  handicrafts,  including  the 
cultivation  of  the  soil.  The  beginnings  of  the  arts  of  pottery, 
basket-making,  building,  clothes-making,  as  well  as  digging,  plant- 
ing, milling  and  other  processes  of  preparing  food,  were  doubt- 
less women's  work  in  the  first  instance,  though  they  were  proba- 
bly raised  to  the  position  of  regular  industries  when  slavery  be- 
came common.  It  is,  however,  noteworthy  that,  even  in  those 
early  handicrafts  devoted  to  the  most  practical  needs  of  life,  the 
decorative  instinct  generally  finds  expression.  Not  only  the 
weapons  of  the  men,  but  the  pots  and  pans  and  other  domestic 
utensils  of  the  women,  carry  carvings  or  mouldings,  which  testify 
to  the  play  or  art  impulses.  Leisure  and  pleasure  thus  appear  as 
ingredients  in  the  earliest  industries. 

To  whatever  source,  then,  we  trace  the  origins  of  industry,  to 
the  use  of  weapons,  snares  and  other  male  apparatus  for  the  fight 
and  hunt,  to  the  instincts  of  play,  imitation  and  adornment  as 
modes  of  self-expression  and  of  pride,  or  to  the  more  distinctively 
utilitarian  work  of  women  and  of  slaves  around  the  home,  we 
find  play  or  pleasure  mingled  with  the  work. 

This  profoundly  interesting  truth  is  attested  by  the  long  sur- 
viving presence  of  the  song  and  other  rhythmic  activities  in 
many  forms  of  associated  labour,  as  well  as  in  the  dancing  which 
in  primitive  societies  was  an  almost  invariable  accompaniment 
of  all  important  enterprises,  war,  hunting  and  harvesting,  and 
which  still  survives  among  us  in  the  Harvest  Home.  Though 
in  slave  industries  this  lighter  element  doubtless  dwindled 
very  low,  it  seldom  died  out  entirely,  as  the  song  of  the 
galley-rowers,  or  of  the  Southern  negroes  in  the  cotton-fields, 
testifies.  Where  the  handicrafts  throve  among  free  men  in 


26  WORK  AND  WEALTH 

Europe,  everywhere  the  motives  of  play,  personal  pride  and  prow- 
ess, find  liberal  expression  in  industry. 

§  4.  This  slight  and  necessarily  speculative  sketch  of  the  origin 
of  industry  is  designed  to  enforce  two  facts.  In  the  first  place, 
we  can  trace  in  every  rudimentary  industry  the  promptings  of 
vital  utility,  laying  the  foundations  of  an  economy  of  efforts  and 
satisfactions  which  furthers  the  organic  development  of  the  in- 
dividual and  the  race.  In  the  second  place,  we  everywhere  find 
what  we  call  distinctively  economic  motives  and  activities  almost 
inextricably  intertwined,  or  even  fused,  with  other  motives  and 
activities,  sportive,  artistic,  religious,  social  and  political. 

To  trace  the  history  of  the  process  by  which  in  modern  civilisa- 
tion economic  or  industrial  activities  have  separated  themselves 
from  other  activities,  assuming  more  and  more  dominance,  until 
the  Industrial  System  and  the  Business  Man  have  become  the 
most  potent  facts  of  life,  would  lie  beyond  our  scope.  Nor  is  it 
at  all  necessary.  What  is  important  for  us  to  realise,  however, 
is  that  this  process  of  industrialisation,  through  which  the  civil- 
ised peoples  have  been  passing,  is  beyond  all  question  the  most 
powerful  instrument  of  education.  It  appears  to  have  done  more 
to  rationalise  and  to  socialise  men  than  all  the  higher  and  more 
spiritual  institutions  of  man,  so  far  as  such  comparisons  are  possi- 
ble. It  has  rationalised  man  chiefly  by  compelling  him  to  ex- 
ercise foresight  and  forethought,  to  subdue  his  will  and  train  his 
active  faculties  to  the  performance  of  long  and  intrinsically  dis- 
agreeable tasks,  in  order  to  realise  some  more  and  more  distant 
object  of  desire,  and  by  obliging  him  to  recognise  the  rigorous 
laws  of  causation  in  his  calculations.  It  has  socialised  him  by 
weaving  an  ever  more  elaborate  tissue  of  common  interests  be- 
tween him  and  a  growing  number  of  his  fellow  men,  and  by 
compelling  him  to  engage  in  closer  cooperation  with  them  for  the 
attainment  of  his  ends.  Though  this  socialisation  is  far  more  ad- 
vanced in  objective  fact  than  in  thought  and  feeling,  it  remains 
true  that  the  direct  and  indirect  association  of  larger  and  more 
various  bodies  or  men  in  modern  industry  and  commerce  is  the 
first  condition  and  the  strongest  stimulus  to  the  expansion  and 
intensification  of  the  social  will. 

It  is  this  orderly  rational  system  of  industry,  employing,  as  it 


THE  HUMAN  ORIGINS  OF  INDUSTRY  27 

j 

does,  the  organic  powers  of  man  for  the  satisfaction  of  his  organic 
needs,  that  we  seek  to  submit  to  valuation. 

The  immense  variety  and  complexity  of  the  arts  and  crafts  of 
which  such  a  system  of  human  industry  consists,  the  long  inter- 
val of  time  which  often  intervenes  between  acts  of  production  and 
of  consumption,  the  differences  of  personality  between  those  who 
perform  the  efforts  of  production  and  those  who  utilise  or  enjoy 
the  fruits  of  those  efforts  in  consumption,  immensely  remote  as 
they  appear  from  the  simple  organic  economy  of  primitive  man, 
do  not  escape  an  ultimate  dependence  upon  organic  laws  and  con- 
ditions. A  human  valuation,  therefore,  must  insist  upon  express- 
ing them  in  terms  of  organic  welfare,  individual  and  social.  As 
human  activities  and  enjoyments  ascend  in  the  process  we  term 
civilisation,  we  shall  expect  to  find  this  organic  life  becoming 
more  psychical,  in  the  sense  that  their  modes  are  more  'reason- 
able' and  the  emotions  that  attach  to  them  are  more  spiritual, 
i.  e.  less  directly  driven  by  animal  instincts.  So  too  we  shall  ex- 
pect industrial  progress  to  contribute  to  a  growing  adjustment 
between  the  individual  and  the  social  economy,  restoring  under 
the  form  of  reasonable  social  service  to  the  more  highly  individ- 
ualised members  of  a  modern  society  an  increasing  measure  of 
that  subservience  to  the  organic  welfare  of  mankind  which  in- 
stinct was  able  to  secure  upon  a  lower  plane  of  conscious  lif  e. 


CHAPTER  in 

REAL  INCOME:  COST  AND  UTILITY 

§  i.  Approaching  on  its  concrete  side  the  economic  system  the 
human  values  of  which  we  seek  to  ascertain,  we  find  it  to  consist 
in  a  series  of  productive  processes  bringing  various  goods  and 
services  into  marketable  shape,  accompanied  by  a  series  of  con- 
sumptive processes  in  which  these  goods  and  services  are  used, 
wasted,  or  otherwise  disposed  of  by  those  who  buy  them  for  per- 
sonal uses.  The  former  set  of  processes,  as  we  have  recognised, 
occupy  a  place  of  so  much  greater  prominence  and  publicity  as 
virtually  to  absorb  the  science  of  industry  or  'economies',  leaving 
to  the  processes  of  consumption  an  obscure  and  entirely  subor- 
dinate position.  Our  organic  or  human  valuation  starts  with  a 
protest  against  this  assumption  of  inequality  in  the  arts  of  pro- 
duction and  consumption.  Its  interpretation  of  economic  pro- 
cesses will  be  disposed  to  lay  as  much  stress  upon  the  history  of 
the  various  commodities  after  they  leave  the  shop-counter  and 
pass  into  the  possession  of  consumers  as  before.  The  human 
good  and  evil  associated  with  economic  'wealth'  must,  viewed 
from  the  organic  standpoint,  depend  as  much  upon  the  nature 
of  its  consumption  as  upon  the  nature  of  its  production. 

This  consideration  will  determine  our  method  of  applying  the 
human  standard  of  values.  Accepting  at  the  outset  the  conven- 
ient distinction  between  the  processes  of  production  and  con- 
sumption, we  shall  approach  the  economic  system  at  the  point 
where  the  two  processes  meet,  that  is  to  say  where  wealth  emerges 
from  the  productive  processes  as  Income,  in  order  to  pass  as  such 
into  the  possession  of  persons  entitled  to  consume  it. 

To  make  the  enquiry  simpler  and  more  easily  intelligible,  we 
will  ignore  for  the  present  all  the  extra-national  or  cosmopolitan 
conditions  of  modern  industry,  and  assume  that  we  are  dealing 
with  a  closed  national  system  producing,  distributing,  and  con- 
suming the  two  thousand  million  pounds'  worth  of  goods  and 

28 


REAL  INCOME:  COST  AND  UTILITY  29 

services  roughly  estimated  to  constitute  the  current  annual  in- 
come of  the  British  nation. 

§  2.  Now  the  habit  of  regarding  wealth  and  income  in  terms  of 
money  is  so  deep-seated  and  persistent  as  to  make  it  difficult  for 
ordinary  'business'  men  to  realise  these  words  in  any  other  than 
a  monetary  sense.  The  ordinary  mind  has  to  break  through  a 
certain  barrier  of  thought  and  feeling  in  order  even  to  present 
to  itself  the  significance  of  'real'  wages  or  'real'  income,  as  dis- 
tinguished from  money  wages  and  money  income.  This  do- 
minion of  the  monetary  standard  is  illustrated  by  the  almost  in- 
stinctive thrill  of  elation  that  is  felt  when  we  are  informed  that 
the  income  of  the  nation  has  risen  from  about  £1,200,000,000  in 
1870  to  £2,000,000,000  in  1912. l  So  accustomed  are  we  to  regard 
money  as  the  measure  of  the  desirable,  that  we  feel  that  this  rise 
of  money  income  must  imply  a  corresponding  rise  in  national 
welfare.  It  requires  some  effort  of  mind  to  realise  even  the  two 
obviously  important  factors  of  the  increase  of  population  and  the 
shift  of  prices,  which,  when  once  realised,  so  evidently  affect  the 
bearing  of  the  money  income  upon  the  national  welfare.  Year 
after  year  trade  reports  and  other  official  documents,  in  com- 
paring the  relative  economic  position  of  the  various  nations  or  the 
fluctuations  of  trade  within  a  single  nation,  habitually  encourage 
this  misleading  influence  of  the  financial  standard  by  publishing 
crude,  uncorrected  monetary  values  as  if  they  were  indicative 
of  industrial  facts,  and  statesmen  take  such  figures  as  valid  evi- 
dence on  which  to  base  a  policy. 

As  regards  the  particular  object  of  our  enquiry,  this  obsession 
of  the  general  mind  by  the  monetary  standard  makes  it  impossible 
for  us  even  to  assume  that  all  our  readers  attach  a  clear  and  con- 
sistent meaning  to  the  term  'real'  income.  It  is  not  quite  easy 
at  first  to  grasp  the  central  and  essential  fact  that  every  receipt 

1 1  have  taken  the  estimate  of  the  total  income  of  the  nation  made  by  Mr.  Flux 
in  his  Reports  of  the  First  Census  of  Production  for  the  United  Kingdom  (1907) 
as  the  basis  for  the  round  figures  adopted  here  for  aggregate  income  and  for  savings. 
As  a  matter  of  fact  Mr.  Flux  assigns  to  savings  a  slightly  higher  figure  and  propor- 
tion of  income  than  that  taken  here.  But  since  for  our  purpose  nothing  depends 
upon  the  exactitude  of  the  figures  (and  indeed  Mr.  Flux  claims  no  such  exactitude 
for  his)  it  is  more  convenient  for  us  to  take  the  round  figures  of  our  text,  though 
probably  in  both  instances,  i.  e.  aggregate  income  and  savings,  they  are  somewhat 
below  the  true  figures  for  1912. 


30  WORK  AND  WEALTH 

of  any  sort  of  income,  whether  as  wages,  rent,  salary,  interest, 
profit,  fees  or  otherwise,  involves  the  coming  into  being  of  a  bit 
of  'real'  income  in  the  shape  of  some  material  goods  or  some 
saleable  service.1  This  fact  once  grasped,  however,  it  becomes 
evident  that  the  £2,000,000,000,  said  to  be  the  nation's  income, 
is  merely  the  monetary  representative  of  goods  and  services  which 
are  the  net  product  of  the  economic  activity  of  the  year,  the 
quantity  of  wealth  produced  over  and  above  that  which  has  gone 
to  maintain  the  existing  material  fabric  of  industry.  The  aggre- 
gate amount  of  'wealth  produced'  is,  of  course,  considerably 
greater,  for  a  large  quantity  of  the  productive  power  must  con- 
tinua^y  be  employed  in  repairing  the  wear  and  tear  sustained 
by  tho  material  instruments  of  production,  the  land,  buildings, 
machinery  and  tools  and  other  forms  of  'fixed'  capital,  and  in 
replacing  the  raw  materials  and  other  forms  of  'circulating' 
capital  which  have  passed  out  of  the  productive  processes  into 
consumable  goods.  The  net  'real'  income  consists  of  the  goods 
and  services  produced  over  and  above  this  provision  for  the 
maintenance  of  the  material  structure  of  the  system. 

There  is,  however,  an  important  qualification  to  this  mode  of 
reckoning  the  net  real  income  of  the  nation  which  needs  mention. 
While  the  portion  of  the  current  product  which  goes  to  replace 
this  wear  and  tear  of  land  and  capital  is  not  included  in  the  goods 
and  services  represented  by  the  £2,000,000,000  and  classed  as 
real  net  income,  the  wear  and  tear  or  maintenance  fund  of  labour 
is  included  in  it.  When  consideration  is  taken  of  the  distribution 
of  what  is  often  termed  the  national  dividend  between  the  re- 
spective owners  of  the  factors  of  production,  this  anomaly  is 
seldom  borne  in  mind.  In  estimating  the  income  of  labour  the 
replacement  fund  is  counted;  in  estimating  the  income  of  land 
and  capital  it  is  not  counted.  But,  illogical  as  this  discrimina- 

1  There  is  no  commoner  stumbling-block  to  the  beginner  in  the  study  of  Political 
Economy  than  the  fact  that  the  income  of  a  rich  man,  amounting  to  say  £10,000, 
when  paid  away  to  persons  who  sell  him  goods  or  personal  services,  seems  to  count 
'over  again'  as  incomes  of  these  persons.  Why,  they  are  disposed  to  ask,  should 
the  private  secretary  who  receives  £400  out  of  this  £10,000  be  required  to  pay  an 
income-tax  upon  a  sum  which  (as  they  say)  has  already  paid  its  share  as  part  of 
the  £10.000?  Nothing  but  a  grasp  of  the  fact  that  the  secretary  produces  a  'real' 
income  of  'services'  corresponding  to  this  £400  which  he  receives  clears  up  the  mis- 
understanding. 


REAL  INCOME:  COST  AND  UTILITY  31 

tion  is,  usage  has  so  universally  accepted  it  that  it  will  be  best 
for  us  in  a  work  not  chiefly  concerned  with  the  problems  of  objec- 
tive distribution  to  give  a  provisional  acceptance  to  it. 

The  real  net  income,  or  national  dividend,  corresponding  to  the 
£2,000,000,000,  consists  of  the  goods  and  services  at  the  disposal 
of  the  recipients  of  this  money  income.  By  applying  each  sov- 
ereign as  they  received  it  in  rent,  wages,  interest,  profit,  fees, 
etc.,  to  purchase  consumable  goods  or  services,  they  might  con- 
sume the  whole  of  it  during  the  current  year.  In  that  event, 
though  provision  would  have  been  made  for  the  bare  upkeep  of 
capital,  no  provision  would  have  been  made  for  its  enlargement 
or  improvement  with  a  view  to  the  future  increase  of  production. 
In  point  of  fact,  that  provision  is  made  by  applying  a  considera- 
ble portion  of  the  net  money  income,  say  £300,000,000,  to  de- 
mand, not  consumable  goods  or  services,  but  more  instruments 
and  materials  of  production.  As  this  process  goes  on  continu- 
ously, it  implies  that  some  3/20  of  the  total  industrial  activity 
of  the  nation  is  engaged  in  making  not  consumable  but  new  capi- 
tal goods.1  This  saving  process  has  an  important  psychology  of 
its  own  to  which  we  shall  give  some  attention  later  on.  At  pres- 
ent it  need  only  be  considered  as  a  reduction  in  the  net  income  of 
consumable  goods  and  services  at  the  disposal  of  a  progressive 
community  for  current  use  and  enjoyment.  This  wealth,  actually 
available  for  current  use,  the  food,  clothing,  shelter  and  other 
domestic  necessaries  and  conveniences,  the  travel,  information, 
education,  recreation,  professional,  official  and  domestic  services, 
the  various  sorts  of  material  and  non-material  comforts  and  lux- 
uries, constituting  the  current  net  real  income  of  consumer's 
goods,  is  the  primary  object  of  our  valuation.  The  new  machines, 
tools,  buildings,  materials  and  other  forms  of  capital,  expressing 
the  £300,000,000  of  savings,  though  entering  our  analysis  upon 
the  costs  side  equally  with  goods  used  for  immediate  consump- 
tion, do  not  figure  directly  on  the  consumption  side,  but  only  in- 
directly in  the  future  consumables  which  they  assist  to  produce. 

§  3.  But  as  regards  the  application  of  our  analysis,  it  makes  no 

1  About  half  of  this  passes  under  the  head  of  over-seas  investments  into  the  in- 
dustrial systems  of  other  nations,  though  the  interest  upon  this  foreign  capital  is 
available  for  consumption  in  this  country. 


32  WORK  AND  WEALTH 

real  difference  whether  we  take  the  narrower  connotation  of  the 
national  dividend  which  includes  only  consumable  goods,  or  the 
broader  one  which  includes  savings.  It  will  no  doubt  easily  be 
admitted  that  a  merely  pecuniary  statement  of  the  'value'  of 
this  dividend  conveys  no  reliable  information  as  to  the  human  or 
vital  welfare  it  involves.  Making  due  allowance  for  all  tem- 
poral or  local  variations  of  price,  the  statement  that  the  national 
income  has  doubled  in  the  last  century,  or  even  that  the  income 
per  head  of  the  population  has  doubled,  affords  no  positive  proof 
that  any  increase  has  been  made  in  the  national  welfare,  much  less 
how  much  increase.  Unless,  however,  we  adopt  an  attitude  of 
general  scepticism  towards  the  economic  structure  of  'civilisa- 
tion/ we  may  admit,  with  Professor  Pigou,1  a  presumption  that 
a  growth  of  the  national  dividend  faster  than  the  growth  of  pop- 
ulation implies  some  increase  of  welfare.  But  even  that  presump- 
tion must  be  qualified  by  the  reflection  that  it  really  rests  upon  a 
view  of  marketable  wealth  which  has  exclusive  regard  to  its  sup- 
posed utility  in  consumption  without  any  corresponding  consid- 
eration of  the  cost  of  its  production.  A  pecuniary  statement  of 
the  national  dividend  which  contained  no  information  as  to  the 
nature  of  the  goods  and  services  comprising  it,  may  be  repudiated 
out  of  hand  as  useless  for  our  purpose.  For  upon  such  a  state- 
ment £i  'worth'  of  'trade  gin'  has  precisely  the  same  value  as  £i 
'worth'  of  'best  books'  or  of  wholesome  bread,  £i  worth  of  hand- 
made lace  sweated  out  of  peasant  women  at  the  cost  of  their 
eyesight  has  precisely  the  same  weight  in  the  money  income  of 
the  nation  as  £i  worth  of  carpentry  or  of  medical  attendance. 

§  4.  If  we  are  to  estimate  the  human  value  of  a  given  national 
income,  it  is  evident  that  we  must  secure  answers  to  three  ques- 
tions. We  must  first  learn  what  the  concrete  goods  and  services 
are  which  constitute  the  'real'  income,  and  then  we  must  trace 
these  concrete  goods  and  services  backwards  through  the  proc- 
esses of  their  production  and  forward  through  the  processes  of 
their  consumption,  in  order  to  learn  the  human  costs  and  utilities 
which  attach  to  each.  The  amount  of  human  wealth  or  'illth' 
which  each  of  these  concrete  'goods'  contains  has,  strictly  speak- 
ing, no  assignable  relation  to  the  money  ticket  put  upon  it  when 
1  Wealth  and  Welfare,  Chap.  I. 


REAL  INCOME:  COST  AND  UTILITY  33 

it  is  sold.  That  sum  of  human  value  can  only  be  worked  out  in 
terms  of  the  actual  processes  of  production  and  consumption 
through  which  the  'goods'  pass.  Some  students  of  current  polit- 
ical economy  may  perhaps  be  disposed  to  cavil  at  this  criticism, 
insisting  that  on  the  average  things  must  be  sold  in  proportion  to 
the  painful  or  otherwise  distasteful  efforts  of  producing  them,  or 
in  proportion  to  the  pleasant  or  otherwise  serviceable  modes  of 
their  consumption.  On  the  average,  they  will  contend,  a  rational 
calculus  of  pleasure  and  pain  underlies  the  operations  of  the  eco- , 
nomic  system.  This  position,  however,  I  claim  to  undermine  by 
showing,  first  that  this  'rational'  calculus  rests  upon  assumptions 
of  free  choice  and  competition  which  are  unwarrantable,  and  sec- 
ondly, that  this  rational  calculus  of  current  pleasures  and  pains, 
so  far  as  it  is  operative,  is  not  a  valid  criterion  of  human  welfare) 
as  conceived  in  the  terms  of  organic  welfare.  Our  task,  it  must 
be  realised,  is  not  that  of  reducing  monetary  values,  or  the  con- 
crete goods  to  which  they  refer,  to  terms  of  average  current  de- 
sirability, but  to  terms  of  that  desirability  corrected  so  as  to  con- 
form to  the  best-approved  standard  of  the  desirable.  In  a  word, 
the  defects  of  average  current  estimates  and  desires,  in  part 
causes,  in  part  effects  of  a  defective  industrial  economy,  must 
themselves  be  valued  and  discounted  in  terms  of  our  human  ideals 
of  individual  and  social  life. 

§  5.  With  this  organic  standard,  the  nature  and  validity  of 
which  will  become  clearer  with  use,  let  us  set  about  our  task  of 
finding  methods  for  assessing  in  terms  of  human  value  the  stocks 
of  concrete  goods  and  services  which  are  the  real  net  income  of 
the  nation.  The  human,  as  distinguished  from  the  money  and 
the  'real'  dividend,  will  consist  of  the  amount  of  vital  or  organic 
welfare  conveyed  in  the  producing  and  consuming  processes  for 
which  this  concrete  income  stands.  What  we  require  then  is  to 
apply  some  sort  of  calculus  of  human  cost  and  human  utility  to 
these  processes.  Now  we  are  confronted  at  the  outset  by  the  po- 
sition of  an  economic  science  which  conceives  production  entirely 
in  terms  of  'cost',  consumption  entirely  in  terms  of  'utility'. 
Indeed,  the  economic  doctrine  of  value  hinges  almost  entirely 
upon  this  antithesis.  For  it  is  mainly  owing  to  its  'costs'  that 
a  limit  of  scarcity  is  set  on  each  'supply',  while  it  is  the  'utility' 


34  WORK  AND  WEALTH 

accorded  by  consumers  that  gives  economic  force  and  meaning 
to  'demand'.  Hence  production  is  conceived  as  a  process  which 
rolls  up  costs  into  commodities,  consumption  as  a  process  that 
unrolls  them  into  utilities. 

Now  an  organic  interpretation  of  industry  cannot  accept  this 
mode  of  conceiving  the  productive  and  consumptive  functions. 
Considerations  of  the  organic  origins  of  industry  lend  no  support 
to  the  assumption  that  production  is  all  'cost'  and  no  'utility', 
consumption  all  'utility'  and  no  'cost'.  On  the  contrary,  in  our 
human  analysis  of  economic  processes  we  shall  rather  expect  to 
find  costs  and  utilities,  alike  in  their  sense  of  pains  and  pleasures 
and  of  organic  losses  and  organic  gains,  commingled  in  various 
degrees  in  all  productive  and  consumptive  processes. 

Our  aim  will  be  to  set  out,  as  well  as  we  can,  reliable  rules  for 
examining  the  productive  and  consumptive  history  of  the  various 
sorts  of  concrete  marketable  goods  so  as  to  discover  the  human 
elements  of  cost  and  utility  contained  in  each,  and  by  a  computa- 
tion of  these  positives  and  negatives  to  reach  some  estimate  of 
the  aggregate  human  value  contained  in  the  several  sorts  of 
commodities  which  form  the  concrete  income  of  the  nation  and 
in  this  income  as  a  whole.  Only  by  some  such  process  is  it  possi- 
ble to  reach  a  knowledge  of  the  real  wealth  of  nations. 

We  may  state  the  problem  provisionally  in  three  questions: 

1.  What  are  the  concrete  goods  and  services  which  constitute 

the  real  national  income? 

2.  How  are  these  goods  produced? 

3.  How  are  they  consumed? 

But  in  truth  the  consideration  of  the  so-called  'concrete'  na- 
ture of  these  goods  is  as  irrelevant  to  our  analysis  as  that  of  the 
money  ticket  placed  on  them.  For  from  the  standpoint  of  wel- 
fare these  goods  are  nothing  but  the  activities  of  those  who  pro- 
duce and  consume  them,  or,  if  it  be  preferred,  the  human  processes 
of  production  and  consumption.  The  human  meaning  of  any 
given  stock  of  wheat  in  our  national  supply  will  consist  of  the 
efforts  of  body  and  mind,  the  thought  and  desire  and  directed 
skill,  put  into  the  several  processes  of  preparing  the  soil,  sowing, 
tending,  reaping  and  marketing  the  wheat,  undergone  by  the 
farmer  in  Manitoba  or  in  Norfolk,  the  merchant,  shipper,  miller, 


REAL  INCOME:  COST  AND  UTILITY  35 

baker  who  convey  it  from  the  farm  and  convert  it  into  bread,  and 
finally  the  activities  of  mastication,  digestion  and  assimilation 
with  the  accompanying  satisfaction  as  it  passes  into  the  physical 
system  of  the  consumer.  And  so  with  every  other  sort  of  con- 
crete marketable  goods  or  services.  From  the  standpoint  of 
human  value,  they  are  wholly  resolvable  into  the  physical  and 
mental  activities  and  feelings  of  the  human  beings  who  produce 
and  consume  them.  It  is  the  balance  of  the  desirable  over  the 
undesirable  in  these  several  activities  and  feelings  that  consti- 
tutes the  human  value  of  any  stock  of  marketable  goods.  The 
standard  of  desirability  will  be  the  conception  of  the  organic  well- 
being  of  the  society  to  which  the  individuals  whose  activities  and 
feelings  are  concerned  belong. 

Or  the  several  stages  of  interpretation  may  be  expressed  as 
follows.  A  given  money  income  must  first  be  resolved  into  the 
concrete  goods  which  it  expresses:  those  goods  must  then  be  re- 
solved into  the  various  efforts  of  production  and  satisfactions  of 
consumption,  estimated  according  to  the  current  ideas  and  de- 
sires of  the  individuals  who  experience  them:  these  current  in- 
dividual estimates  of  the  desirable  must  be  adjusted  by  reference 
to  an  ideal  standard  of  the  socially  desirable.  The  extent  of  this 
latter  process  of  adjustment  will,  of  course,  depend  upon  how 
far  the  actual  current  ideas  and  feelings  of  individuals  are  kept 
in  essential  harmony  with  the  true  standard  of  social  well-being 
by  the  natural  evolution  of  an  organic  society. 

§  6.  Our  task  in  seeking  to  devise  a  method  for  the  human  in- 
terpretation or  valuation  of  Industry  consists  then  hi  confront- 
ing the  goods  which  form  the  net  consumable  income  of  the  com- 
munity, and  in  finding  answers  to  the  two  related  questions: 

What  are  the  net  human  costs  involved  in  their  production? 

What  are  the  net  human  utilities  involved  in  their  consump- 
tion? 

A  simple  sum  in  subtraction  should  then  give  us  the  result  we 
seek — so  far  as  any  such  quantitative  calculus  is  valid  and  feasi- 
ble.1 

Now  though  economists,  of  course,  are  well  aware  that  many 

tThe  exceedingly  important  question  of  the  limits  to  the  validity  of  such  a 
quantitative  calculus  is  discussed  in  the  concluding  chapter. 


36  WORK  AND  WEALTH 

of  the  processes  of  production  contain  elements  of  pleasure  and 
utility  to  the  producers,  while  some  of  the  processes  of  consump- 
tion contain  elements  of  pain  and  cost  to  the  consumers,  they 
have,  rightly  from  their  standpoint,  ignored  these  qualifications 
in  their  general  formulae,  and  have  represented  'goods'  from  the 
producer's  side  as  consisting  entirely  of  accumulated  costs,  while 
from  the  consumer's  side  they  constitute  pure  utility.  Though 
our  brief  preliminary  survey  of  the  origins  of  industry  indicates 
that  no  such  sharp  distinction  between  production  and  consump- 
tion can  ultimately  be  maintained,  and  that  throughout  the  whole 
continuous  career  of  goods  from  cradle  to  grave  the  activities 
bestowed  on  them  are  composites  of  pleasure  and  pain,  cost  and 
utility,  organic  gain  and  organic  loss,  socially  desirable  and  so- 
cially undesirable,  it  will  be  expedient  to  take  our  start  from  the 
commonly-accepted  economic  position,  and  to  give  separate  con- 
sideration to  the  human  values  underlying  processes  of  production 
on  the  one  hand,  processes  of  consumption  on  the  other. 

The  general  lines  along  which  such  an  investigation  must  pro- 
ceed are  unmistakable. 

In  order  to  express  business  'costs'  in  terms  of  human  cost, 
we  require  to  know  three  things: 

1.  The  quality  and  kind  of  the  various  human  efforts  involved 

in  the  business  'cost'. 

2.  The  capacities  of  the  human  beings  who  give  out  these 

efforts. 

3.  The  distribution  of  the  effort  among  those  who  give  it  out. 
Corresponding  strictly  to  this  analysis  of  'costs'  of  Production 

will  be  the  analysis  of  'utility'  of  Consumption.  There  we  shall 
want  to  know: 

1.  The  quality  and  kind  of  the  satisfaction  or  utility  yielded 

by  the  'economic  utility'  that  is  sold  to  consumers. 

2.  The  capacities  of  the  consumers  who  get  this  'economic 

utility'. 

3.  The  distribution  of  the  economic  utility  among  the  con- 

suming public. 

The  humanist  criticism  of  Industry  is  condensed  into  this 
analysis.  The  humanist  requires  that  the  effort  expended  on 
any  sort  of  production  shall  be  such  as  to  contain  a  minimum  of 


REAL  INCOME:  COST  AND  UTILITY  37 

painful  or  injurious  or  otherwise  undesirable  activity.  His  com- 
plaint is  that  Industry,  as  actually  organised  and  operated  under 
a  system  which  treats  all  forms  of  productive  human  effort  as 
marketable  goods,  does  not  secure  this  human  economy.  The 
humanist  requires  that  the  persons  set  to  give  out  undesirable 
effort,  'human  cost',  shall  be  those  best  capable  of  sustaining 
this  loss.  Weak  women  or  children,  for  example,  shall  not  be 
set  to  do  work  heavy  or  dangerous  in  its  incidence,  when  strong 
men  are  available  who  could  do  it  easily  and  safely.  The  human- 
ist requires  that  undesirable  or  humanly  costly  work  shall  not 
merely  be  confined  to  classes  of  persons  capable  of  performing 
it  most  easily  and  safely,  but  that  the  distribution  of  such  effort 
shall,  as  regards  length  of  time  and  intensity  of  pace,  be  such  as 
to  reduce  the  human  cost  per  unit  of  product  to  a  minimum. 
The  humanist  criticism  of  Industry  upon  the  Costs  side  consists 
in  pointing  out  that  there  is  no  adequately  reliable  or  normal 
tendency  for  the  business  economy  of  costs  to  conform  to  this 
three-fold  human  economy. 

Similarly,  turning  to  the  consumption  side,  the  humanist 
points  out:  i.  That  many  of  the  'goods'  sold  to  consumers  are 
inherently  destitute  of  human  utility,  or,  worse,  are  repositories 
of  disutility;  and  that  money  values  is  no  true  key  to  human  util- 
ity. 2.  That  the  amount  of  utility  or  welfare  to  be  got  out  of 
any  goods  depends  upon  the  character,  the  natural  or  acquired 
capacity,  of  the  particular  consumers  or  classes  of  consumers 
into  whose  hands  they  fall.  3.  That  a  true  economy  of  consump- 
tion, therefore,  involves  their  distribution  among  consumers  in 
proportion  to  their  capacity  to  use  them  for  purposes  of  welfare. 
It  is  contended  that  the  current  working  of  our  industrial  system, 
on  its  distributive  and  consumptive  side,  makes  no  reliable  pro- 
vision for  securing  that  the  maximum  of  human  utility  shall  at- 
tach to  the  consumption  of  the  national  income. 

§  7.  To  test  in  detail  the  exact  validity  of  this  humanist  criti- 
cism would  require  us  to  examine  the  costs  and  the  utility,  eco- 
nomic and  human,  represented  in  each  item  of  all  the  various 
supplies  of  goods  and  services  which  constitute  the  national  in- 
come. This  is  manifestly  impracticable.  Nor  is  it  necessary  for 
our  purpose,  which  is  to  establish  a  sound  method  of  valuation 


38  WORK  AND  WEALTH 

rather  than  to  endeavour  to  form  an  exact  computation  of  the 
values  it  discloses.  With  this  object  in  view  it  will  be  sufficient 
to  direct  our  enquiry  to  the  accepted  classes  or  grades  of  human 
activities  figuring  as  economic  costs,  and  the  corresponding 
classes  or  grades  of  human  utilities  affected  by  consumption. 

Let  us  begin  with  the  'costs'  side. 

Accepting  the  general  categories  of  costs  of  production,  as 
rent,  interest  and  profit,  salaries  and  fees,  wages  (for  all  other 
business  'costs',  as  for  instance,  cost  of  material,  machinery, 
fuel,  can  be  resolved  into  these),  let  us  consider  what  is  the  nature 
of  the  human  costs  for  which  these  payments  are  made,  in  the 
chief  orders  of  industry,  and  how  these  human  costs  are  related 
to  the  economic  costs. 

At  the  outset  of  this  enquiry,  however,  it  will  be  convenient 
to  eliminate  one  economic  'cost'  of  considerable  magnitude  from 
our  consideration,  viz.  economic  rent.  For,  although  Nature, 
or  the  earth,  may  in  a  study  of  objective  industry  be  regarded 
as  a  productive  agent,  yielding  materials,  physical  energy,  and 
special  utilities,  this  work  involves  no  human  effort,  and  there- 
fore is  represented  by  no  human  cost.  This  statement,  of  course, 
by  no  means  implies  that  human  foresight  and  activities  play  no 
part  in  the  effective  supply  of  land  and  other  natural  resources. 
Such  resources,  hitherto  existing  outside  the  industrial  system, 
are  continually  being  discovered,  brought  within  reach  and  de- 
veloped by  human  skill  and  effort,  while  new  or  improved  uses 
are  continually  being  obtained  from  natural  resources  already 
within  reach.  In  such  processes  of  discovery  and  development 
much  capital,  ability,  and  labour,  are  constantly  engaged,  the 
costs  of  which  must  be  defrayed.  Moreover,  in  certain  uses  of 
land  for  agricultural  and  other  purposes,  provision  must  be  made 
for  wear  and  tear  or  replacement.  But  all  such  costs  or  expenses 
are  really  payments  for  the  capital  and  labour  employed  on  this 
work  of  development  or  upkeep.  They  are  not  payments  for 
the  use  of  natural  resources.  They  are  not  economic  rent.  That 
business  cost  has  no  human  cost  attached  to  it.  From  the  stand- 
point of  the  manager  of  a  particular  business  the  payment  of 
rent  is  necessary  to  enable  him  to  get  the  use  of  the  land  or  other 
natural  agent  he  requires.  Where  private  property  in  land  ex- 


REAL  INCOME:  COST  AND  UTILITY  39 

ists,  the  payment  of  such  rent  is  legally  necessary.  Where  the 
maintenance  of  such  legal  rights  has  enabled  land  values  to  ex- 
change freely  with  other  forms  of  wealth,  a  moral  expediency  may 
be  claimed  for  the  payment  of  rent.  But  no  human  cost  corre- 
sponds to  it.  In  the  organic  interpretation  of  industry,  it  figures 
as  waste.  While,  therefore,  due  account  must  be  taken  of  this 
division  of  wealth  or  human  utilities  in  any  final  survey  of  our 
social  economy,  it  may  be  dismissed  from  our  immediate  con- 
sideration. 

§  8.  In  order  to  get  a  dear  understanding  of  industry  regarded 
from  the  standpoint  of  human  costs,  it  will  be  convenient  to 
fasten  our  attention  first  on  the  structure  and  working  of  the 
single  businesses  which  are  the  productive  units  of  the  system. 
For  the  business  is  a  closer,  more  compact,  and  more  intelligible 
structure  than  the  trades,  markets,  or  other  larger  divisions  of 
industry.  We  shall,  therefore,  endeavour  to  analyse  the  com- 
binations of  human  effort  as  they  are  expressed  in  the  various 
types  of  business,  so  as  to  discover  and  to  estimate  the  human 
costs  that  are  involved. 

Though  the  term  Business,  as  we  use  it  here,  must  be  extended 
so  as  to  include  all  sorts  of  centres  of  economic  activity  not  com- 
monly included,  such  as  a  school,  a  doctor's  practice,  a  theatre, 
it  will  be  best  to  take  for  our  leading  case  an  ordinary  manufac- 
turing business.  Here  are  gathered  into  close  cooperation  a  large 
number  of  human  and  non-human  factors  of  production.  The 
centre  of  the  little  system  is  the  manager,  employer,  or  director, 
whose  ideas,  desires,  and  purposes  govern  and  regulate  the  move- 
ments of  the  various  forms  of  capital  and  labour.  This  man  has 
got  together  on  his  premises  a  quantity  of  machinery  and  other 
plant  which  express  a  complicated  growth  of  invention  running 
far  back  into  the  past  and  derived  from  great  numbers  of  human 
brains.  These  machines  and  plant  embodying  these  inventive 
ideas  were  made  by  past  labour  of  various  kinds.  This  manager 
or  director,  in  planning  the  Business,  chose  what  seemed  the  best 
apparatus  for  the  purposes  he  had  in  mind.  He  induced  a  num- 
ber of  investors  or  capitalists  to  lend  the  money  which  enabled 
him  to  obtain  this  apparatus,  and  to  hire  the  various  sorts  of 
labour  power  required  to  operate  it.  This  labour  power  itself  is 


40  WORK  AND  WEALTH 

the  product  of  the  energies  of  man  in  the  past,  the  direct  ancestry 
of  the  labourers  who  produced  the  beings  that  give  forth  the 
labour-power,  the  past  generations  of  men  whose  growing  knowl- 
edge and  practice  yielded  the  training  and  the  habits  of  industry 
and  of  cooperation  essential  for  the  productiveness  of  labour  in 
the  modern  arts  of  industry. 

Here  are  evidently  many  different  sorts  of  human  effort,  some 
of  them  physical,  others  intellectual,  some  pleasurable,  others 
painful,  some  beneficial,  others  detrimental,  to  the  individuals 
who  give  out  the  effort,  or  to  society. 

All  of  these  productive  energies  rank  in  Political  Economy  as 
'costs',  and  as  such  are  remunerated  out  of  the  product.  Which 
of  these  are  human  'costs'  and  in  what  sense  and  what  degree? 
Such  are  the  questions  that  lie  immediately  before  us,  if  we  are 
seeking  to  reduce  our  £2,000,000,000  to  terms  of  human  well- 
being. 

§  9.  In  this  conversion  of  economic  into  human  costs  we  can 
best  begin  by  considering  the  fundamental  distinction  between 
creation  and  imitation,  enforced  with  so  much  penetration  by  the 
French  sociologist,  M.  Tarde.  It  is  not  in  its  primary  signifi- 
cance a  doctrine  of  costs,  but  a  division  of  productive  energy  into 
two  classes.  All  social  progress,  indeed  all  social  changes  up- 
wards or  downwards,  according  to  this  theory,  comes  about  in 
the  following  way.  Some  unusually  powerful,  original,  or  enter- 
prising person,  assisted  often  by  good  fortune,  makes  what  is 
called  a  discovery,  some  true  and  useful  way  of  doing  things  or 
of  thinking  about  things,  or  even  of  saying  things.  This  new 
truth,  new  phrase,  new  dodge,  is  capable  of  being  recognised  as 
interesting  or  useful,  not  only  by  its  discoverer,  but  by  the  many 
who  had  not  the  wit  or  the  courage  or  the  luck  to  discover  it  for 
themselves.  By  suggestion,  infection,  contagion,  or  conscious 
imitation,  or  by  any  combination  of  those  forces  and  habits  that 
constitute  the  social  nature  of  man,  the  novelty  becomes  adopted 
and  applied  by  an  ever-growing  number  of  persons,  over  a  widen- 
ing area,  until  it  becomes  an  accepted  practice  or  convention  of 
the  whole  society.  Every  new  religious  or  moral  idea  or  senti- 
ment, every  scientific  law,  every  invention  in  the  arts  of  industry, 
every  development  of  a  new  taste,  thus  proceeds  from  one  or 


REAL  INCOME:  COST  AND  UTILITY  41 

more  special  centres  of  original  discovery,  and  spreads  by  a  well- 
nigh  automatic  process  of  expansion  or  imitation. 

§  10.  Now  this  distinction  between  creation  and  imitation, 
as  propounded  and  applied  by  M.  Tarde,  is  doubtless  open  to 
serious  objections.  The  psychology  of  imitation  is  shallow,  for 
under  this  single  term  is  covered  what  are  in  reality  many  dif- 
ferent actions,  while  the  whole  conception  of  imitation  as  a  pro- 
cess is  too  mechanical.  To  some  of  these  defects  we  shall  refer 
presently.  But  though,  regarded  as  an  explanation  of  the  pro- 
cesses of  human  progress,  the  antithesis  of  creation  and  imitation 
does  not  satisfy,  it  furnishes  an  exceedingly  useful  starting  point 
towards  a  psychological  analysis  of  economic  processes.  For  in 
the  evolution  of  industry  it  is  quite  evident  that  improvements 
do  come  about  in  this  manner.  A  comparatively  small  number 
of  original  or  curious  minds  invent  new  uses  or  new  ways  of  doing 
things  that  are  better  than  the  old,  or  they  recognise  the  value 
of  new  ideas  which  others  failed  to  recognise,  and  they  have  the 
energy  and  enterprise  to  put  the  new  ideas  into  operation.  Many 
of  the  inventions  are  not  good  enough  or  big  enough;  only  by  a 
considerable  number  of  little  increments  of  novelty  will  a  new 
machine,  or  a  new  process,  emerge  into  economic  vitality,  or,  in 
business  language,  become  profitable.  But  where  an  invention 
or  improvement  has  once  emerged,  imitation  multiplies  it  and  it 
passes  into  general  use.1 

A  comparatively  small  number  of  creative  or  inventive  minds 
thus  undoubtedly  play  an  exceedingly  important  part  in  the 
development  of  industry.  The  brief  acts  of  thinking  of  a  Watt, 

1  Tarde  applies  the  same  term  'imitation'  to  two  different  sorts  of  act.  The  busi- 
ness man  or  employer  who  recognises  some  improved  machine  or  method  and  copies 
it  is  an  imitator.  Every  improvement  thus  starting  from  a  centre  of  discovery  be- 
comes diffused  throughout  a  trade. 

But  the  term  'imitation'  is  also  applied  to  the  regular  work  of  the  routine 
operator,  who  is  constantly  engaged  in  repeating  some  single  process.  Now,  re- 
garded as  psychological  and  as  economic  facts,  these  two  imitations  are  distinct. 

The  former  is  the  adoption  of  a  discovery  involving  an  act  of  recognition  and  of 
judgment — not  a  purely  automatic  imitation — at  any  rate  until  it  has  become  a 
common  form  in  the  trade.  The  employer  who  copies  or  adopts  an  improvement 
performs  a  single  act — he  incorporates  this  improvement  in  the  technique  of  his  mill 
or  shop — once  for  all.  When,  however,  it  is  said  of  a  machine-worker  that  his  work 
is  imitative,  something  different  is  meant.  He  is  continually  repeating  himself, 
each  act  of  repetition  involving  less  consciousness  in  the  adaptation  of  means  to  end. 


42  WORK  AND  WEALTH 

a  Stevenson,  a  Siemens  or  an  Edison,  appear  to  be  incomparably 
more  productive  in  effect  than  the  routine  life-toil  of  the  many 
thousands  of  workers  who  simply  repeat  hour  by  hour,  day  by 
day,  year  by  year,  some  simple  single  process  they  have  learned. 
It  is  true  that  invention  is  too  narrow  a  term  properly  to  express 
the  distinction  we  are  examining  between  that  work  which  ex- 
presses the  creative  energy  of  man  and  that  which  is  essentially 
imitative.  For  if  a  successful  invention  furnishes  machinery  or 
methods  which  thus  multiply  the  productivity  of  human  labour, 
the  skilful  organisation  and  administration  of  a  business,  the 
work  done  by  the  employer,  has  the  same  sort  of  effect.  An  able 
employer  who  directs  his  business  with  knowledge  and  foresight, 
gathering  together  just  the  right  men,  materials  and  machinery, 
producing  the  right  goods  at  the  right  time,  and  marketing  them 
properly,  seems  by  his  personal  ability  greatly  to  enlarge  the 
valuable  output  of  the  entire  business.  In  a  big  business  he  seems 
to  be  as  productive  as  a  thousand  men. 

§  ii.  So  a  broad  distinction  is  built  up  between  Ability  and 
common  Labour,  the  creative  and  the  merely  imitative  work  of 
man.  From  this  distinction  has  been  drawn  an  ingenious  de- 
fence of  the  current  inequalities  in  distribution  of  wealth.  Since 
all  the  progress  of  modern  industry  is  really  attributable  to  the 
ability  and  enterprise  of  a  small  group  of  inventing,  organising 
and  enterprising  people,  common  labour  being  in  itself  no  more 
skilful,  no  more  productive  than  before,  there  can,  it  is  main- 
tained, be  neither  justice  nor  reason  in  the  claims  of  labour  to  a 
larger  share  of  that  huge  increase  of  wealth  due  to  the  ability 
of  the  few. 

I  do  not  propose  just  now  to  examine  the  validity  of  this  con- 
tention. What  criticism  I  have  to  offer  will  emerge  in  the  course 
of  my  closer  examination  of  the  nature  of  industrial  work.  At 
present  I  will  only  ask  readers  to  observe  that  the  doctrine  as- 
sumes that  payment  for  industrial  services  must  or  ought  to  be 
determined  by  the  productivity  of  those  services,  not  by  their 
'cost'. 

Now,  our  immediate  enquiry,  we  must  remember,  is  into  hu- 
man costs.  And  the  distinction  between  creative  and  imitative 
work  is  particularly  instructive  in  its  bearing  upon  human  costs. 


REAL  INCOME:  COST  AND  UTILITY  43 

For  if  we  grade  the  various  sorts  of  human  effort  that  contribute 
to  the  production  of  wealth  according  to  the  amount  of  creative 
and  imitative  character  they  seem  to  possess,  some  valuable  light 
will  be  thrown  upon  the  distribution  of  human  costs  among  the 
various  classes  of  producers. 

Leaving  out  of  consideration  Land,  which,  as  a  factor  in  pro- 
duction, involves  no  output  of  human  effort,  we  shall  find  that 
the  provision  and  application  of  all  the  other  factors,  ability, 
capital  and  labour,  involve  some  human  effort  both  of  a  creative 
and  an  imitative  type  and  contain  some  elements  of  'cost'. 

For  the  purpose  of  this  analysis  I  propose  to  classify  productive 
activities  under  the  following  heads :  Art,  Invention,  Professional 
Service,  Organisation,  Management,  Labour,  Saving.  The  war- 
ranty for  this  classification  will  emerge  in  the  course  of  the  analy- 
sis. 


CHAPTER  IV 

THE  CREATIVE  FACTOR  IN  PRODUCTION 

§  i.  The  most  distinctively  creative  kind  of  human  work  is 
called  art.  In  motive  and  in  performance  it  is  the  freest  expres- 
sion of  personality  in  work.  The  artist  in  what  are  termed  the 
fine  arts,  e.  g.  as  painter,  poet,  sculptor,  musician,  desires  to  give 
formal  expression  to  some  beautiful,  true  or  otherwise  desirable 
conception,  in  order  either  to  secure  for  himself  its  fuller  realisa- 
tion or  the  satisfaction  of  communicating  it  to  others.  It  is  not, 
however,  necessary  for  our  purpose  to  enter  upon  the  exact  psy- 
chology of  art  motives  or  processes.  Indeed,  we  are  not  concerned 
with  the  whole  range  of  artistic  activity.  So  far  as  the  artist 
works  simply  and  entirely  for  his  own  satisfaction,  in  order  to 
express  himself  to  himself,  he  cannot  be  deemed  to  be  contribut- 
ing to  the  economic  income  of  the  nation.  For  us  the  artist  is  the 
producer  of  a  marketable  commodity,  and  we  are  concerned  to 
discover  the  'economic'  and  the  'human'  costs  which  he  incurs 
in  this  capacity. 

Now  so  far  as  the  painter,  poet,  or  musician  works  as  pure 
artist,  exercising  freely  his  creative  faculty,  his  economic  'costs' 
consist  merely  of  his  'keep',  the  material  and  intellectual  con- 
sumption necessary  to  support  him  and  to  feed  his  art.  The  net 
human  costs  of  the  creative  work  are  nil.  For  though  all  creative 
work  may  involve  some  pains  of  travail,  those  pains  are  more  than 
compensated  by  the  joy  that  a  child  is  born.  Even  if  we  dis- 
tinguish the  creative  conception  from  the  process  of  artistic  exe- 
cution, which  may  involve  much  laborious  effort  not  interesting 
or  desirable  in  itself,  we  must  still  remember  that  these  labours 
are  sustained  and  endowed  with  pleasurable  significance  as  means 
to  a  clearly  desired  end,  so  that  the  whole  activity  becomes  in 
a  real  sense  a  labour  of  love.  In  other  words,  the  human  costs 
are  outweighed  by  the  human  utility  even  in  the  processes  of 
production,  so  that  the  pure  practice  of  art  is  a  net  increase  of 

44 


THE  CREATIVE  FACTOR  IN  PRODUCTION  45 

life.  The  artist,  who,  following  freely  his  own  creative  bent,  pro- 
duces pictures,  plays  or  novels  which  bring  him  in  great  gains, 
is  thus  in  the  position  of  being  paid  handsomely  for  work  which 
is  in  itself  a  pleasure  to  perform  and  which  he  would  do  just  as 
well  if  he  were  only  paid  his  human  'keep'.  The  wasteful  social 
economy  of  the  ordinary  process  of  remunerating  successful  art- 
ists needs  no  discussion.  For  the  true  art  faculty  resembles  those 
processes  by  which  Nature  works  in  the  organic  world  for  the  in- 
crease of  commodities  whose  comparative  scarcity  secures  for 
them  a  market  value.  A  poet  who  'does  but  sing  because  he 
must',  and  yet  is  paid  heavily  for  doing  so,  is  evidently  getting 
the  best  of  both  worlds.  Our  present  point,  however,  is  that  the 
'economic  cost'  which  his  publisher  incurs  in  royalties  upon  the 
sales  of  his  poem  is  attended  by  no  net  'human  cost'  at  all,  but 
by  a  positive  fund  of  'human  utility'.  And  this  holds  of  all  truly 
creative  work:  the  performance  involves  an  increase  of  life,  not 
that  loss  which  is  the  essence  of  all  human  cost. 

§  2.  I  have  spoken  of  the  pure  'artist'.  The  artistic  producer 
who  sells  his  freedom  to  the  moneyed  public  may  incur  the  heavi- 
est of  human  costs,  the  degradation  of  his  highest  quality.  The 
temptation  to  incur  these  moral  and  intellectual  damages  is  great 
in  any  nation  where  the  dominant  standard  of  personal  success 
is  money  income  and  expenditure.  But  perhaps  there  is  a  false 
simplicity  in  the  romantic  view  of  artistic  genius,  which  assumes 
that  the  artist  and  his  work  are  necessarily  degraded  by  induce- 
ments to  work  for  a  public,  instead  of  working  for  himself  alone. 
It  may,  indeed,  be  held  that  an  artist  who  is  so  self-centred  as  to 
have  no  conscious  consideration  of  the  artistic  needs  and  capa- 
bilities of  his  fellow-men,  is  so  essentially  inhuman  as  to  be  in- 
capable of  great  work.  The  use  of  an  art-gift  for  communion 
with  others,  involving  some  measure  of  conscious  social  direction, 
seems  involved  in  the  humanity  of  the  artist.  Even  when  that 
direction  takes  the  shape  of  market-prices,  it  does  not  necessarily 
incur  the  violent  censure  bestowed  by  romantic  persons.  When 
a  sound  public  taste  operates,  this  direction  may  be  justified. 
The  portraits  which  Mr.  G.  F.  Watts  painted  reluctantly  for 
money  need  not  be  considered  a  waste  of  his  powers.  The  nature, 
again,  of  many  creative  minds  seems  to  require  the  application 


46  WORK  AND  WEALTH 

of  an  external  stimulus  to  break  down  a  certain  barrier  of  sterile 
self-absorption  or  of  diffidence,  which  would  rob  humanity  of 
many  of  the  fruits  of  genius.  At  any  rate  it  need  not  be  assumed 
that  working  for  a  public,  or  even  for  a  market,  is  essentially  in- 
jurious. Where  the  taste  which  operates  through  the  demand  is 
definitely  base,  and  where  the  practice  and  the  consciousness  of 
having  sold  one's  soul  for  money  are  plainly  realised,  no  doubt 
can  exist.  But  where  public  sympathy  and  appreciation,  even 
exercised  through  the  market,  induce  the  artist  to  subordinate 
some  of  his  private  tastes  and  proclivities  to  the  performance  of 
work  which,  though  of  secondary  interest  to  himself,  has  a  sound 
social  value,  the  pressure  of  demand  may  produce  a  larger  body 
of  real  wealth  at  no  real  human  cost  to  the  producer.  Very  dif- 
ferent, of  course,  are  the  instances  urged  with  so  much  passionate 
insistence  by  Ruskin,  where  depraved  public  tastes,  springing 
directly  from  luxury  and  idleness,  debauch  the  natural  talents  of 
artists,  and  poison  the  very  founts  of  the  creative  power  of  a  na- 
tion. Corruptio  optimi  pessima.  The  production  of  base  forms 
of  art,  in  painting,  music,  the  drama,  literature,  the  plastic  arts, 
must  necessarily  entail  the  highest  human  costs,  the  largest  loss 
of  human  welfare,  individual  and  social.  For  such  an  artist 
poisons  not  only  his  own  soul  but  the  social  soul,  adulterating 
the  food  designed  to  nourish  the  highest  faculties  of  man. 

There  is,  however,  a  sense  in  which  it  is  true  that  every  pressure 
of  social  direction  or  demand  upon  the  artist  impairs  the  creative 
character  of  his  work.  For  such  social  demand  rests  upon  a  sim- 
ilarity of  taste  among  the  members  of  a  public,  and  its  satisfac- 
tion requires  the  artist  to  repeat  himself.  An  artist,  endowed  by 
the  State  or  some  other  body,  might  express  himself  in  unique 
masterpieces,  as  was  the  case  with  the  great  artists  of  antiquity 
or  of  the  Renaissance  who  were  fortunate  in  their  private  or 
public  patrons.  But  art,  supported  by  numerous  private  pur- 
chasers, whose  social  standards  mould  their  tastes  to  tolerably 
close  conformity,  must  stoop  to  qualify  creation  by  much  imita- 
tive repetition.  This  often  involves  a  large  human  cost,  im- 
posing an  injurious  specialisation,  mannerisms  or  mechanical 
routine.  This  is  particularly  true  of  arts  where  a  refractory 
material  gives  great  importance  to  technique,  and  where  the 


THE  CREATIVE  FACTOR  IN  PRODUCTION  47 

practice  of  this  technique  necessarily  restricts  the  spontaneity 
of  execution. 

§  3.  The  descent  from  Artist  to  the  more  or  less  mechanical 
producer  of  art-products  is  marked  by  many  grades.  There  is 
the  grade  which  does  not  pretend  to  any  free  exercise  of  the 
creative  faculty,  confining  itself  to  interpretation  or  execution. 
This  in  music  and  in  certain  other  fine  arts  is  signified  by  adopt- 
ing the  French  term  'artiste'.  But  some  of  this  interpretative 
work  affords  large  scope  for  truly  creative  work.  A  traditional 
or  written  drama,  a  score  of  music,  or  other  necessarily  imper- 
fect and  half-mechanical  register  of  some  great  creative  work, 
requires  a  constant  process  of  re-creation  by  a  sympathetic  spirit. 
In  such  arts  there  is  a  genuinely  creative  cooperation  between 
the  original  composer  and  his  interpreters,  the  latter  enjoying 
some  real  liberty  of  personal  expression  and  giving  merit  to  the 
performance  by  this  union  of  reproductive  and  creative  achieve- 
ment. The  great  actor  or  musician  may  thus  even  come  to  use 
the  work  of  the  playwright  or  the  composer  as  so  much  material 
for  his  own  creative  expression.  He  may  even  carry  this  to  an 
excess,  ousting  his  predecessor  and  parasitically  utilising  his  rep- 
utation for  the  display  of  his  own  artistic  qualities  or  defects. 
In  painting  and  sculpture,  of  course,  we  come  to  a  mode  of  skilled 
imitation,  that  of  the  copyist,  where  the  free  creative  element  is 
confined  to  far  narrower  limits.  The  main  skill  here  is  that  of 
technical  imitation,  not  of  interpretation. 

As  we  descend  from  the  higher  grades  of  distinctively  creative 
art  to  these  interpretative  and  more  or  less  imitative  grades,  it 
will  be  evident  that  larger  human  'costs'  of  production  are  apt 
to  emerge.  All  imitation  or  repetition,  either  of  oneself  or  of 
another,  is  not  inhuman.  There  is  a  rhythm  in  the  processes  of 
organic  life  which  even  requires  some  repetition.  But  this  repe- 
tition is  never  precise,  for  organic  history  does  not  exactly  repeat 
itself.  The  attempt,  therefore,  to  induce  a  person  to  perform  an 
intricate  process  many  times  and  at  short  intervals  with  great  ex- 
actitude, is  against  humanity.  It  involves  some  physical  and 
moral  injury,  a  human  cost.  We  shall  consider  the  more  serious 
effects  of  this  procedure  when  we  come  to  consider  that  work  of 
industry  most  widely  removed  from  art.  In  considering,  how- 


48  WORK  AND  WEALTH 

ever,  the  sub-artistic  workers  it  will  not  be  right  to  rate  the  hu- 
man costs  too  high.  A  good  deal  of  scope  for  personal  satisfaction 
remains  in  many  of  these  kinds  of  work.  The  sense  of  skill  in 
overcoming  difficulties,  evoked  wherever  any  intricate  work  is 
done  by  brain  and  hand,  yields  a  vital  joy.  This  the  executant 
artist,  even  though  mainly  a  copyist,  experiences  in  no  mean 
measure.  It  sustains  a  fine  vitality,  and,  what  is  significant  for 
our  particular  enquiry,  it  involves  low  human  cost,  unless  the 
pace  and  strain  of  repetition  are  carried  to  excess.  Wherever  any 
reasonable  scope  for  individual  expression  or  achievement  re- 
mains, though  the  main  body  of  the  product  may  be  rigorously 
prescribed  by  close  imitation,  or  ordered  by  mechanical  contriv- 
ance, the  art  spirit  lives  and  the  human  costs  are  low.  The 
photographer,  or  even  the  skilled  performer  on  the  pianola,  re- 
tains a  larger  measure  of  the  nature  and  the  satisfaction  of  the 
artist  than  a  merely  cursory  consideration  of  his  occupation 
would  suggest. 

A  considerable  and  growing  proportion  of  productive  energy 
is  given  out  in  these  various  levels  of  artistic  or  creative  work, 
and  the  proportion  of  the  national  income  represented  by  this 
product  is  growing  with  fair  rapidity  in  every  modern  civilised 
community. 

§  4.  From  the  fine  arts  we  proceed  by  an  easy  transition  to  the 
processes  of  discovery  and  invention  which  play  so  important  a 
role  in  progressive  industry  and  are  leading  channels  of  creative 
activity.  The  process  of  discovering  a  new  relation  between 
phenomena,  establishing  a  new  fact  or  a  new  law,  has  much  in 
common  with  artistic  creation.  The  scientific  imagination  is 
creative  through  its  use  of  the  existing  material  of  knowledge  to 
frame  hypotheses.  Indeed,  the  disinterested  play  of  the  mind 
in  the  explanation  of  facts  by  bringing  them  within  the  range  of 
scientific  laws,  or,  conversely,  in  extending  the  range  of  known 
laws  to  new  groups  of  facts,  is  a  process  of  adventure  containing 
novelties  of  insight  and  of  outlook  akin  to  artistic  production. 
Those  philosophers,  indeed,  who  hold  that  the  laws  of  science  are 
nothing  other  than  the  patterns  which  man  imposes  upon  the 
phantasmagoria  of  experience  for  his  own  private  ends,  would 
make  the  whole  of  scientific  discovery  merely  an  art,  differing 


THE  CREATIVE  FACTOR  IN  PRODUCTION     49 

from  the  fine  arts  in  having  utility  rather  than  beauty  for  its 
goal.  But  we  need  not  press  this  interpretation  in  order  to  per- 
ceive the  similarity  of  all  disinterested  pursuit  of  knowledge  to 
the  fine  arts.  When  a  mathematician  speaks  of  a  beautiful  solu- 
tion to  a  problem,  he  is  not  using  the  language  of  hyperbole,  but 
attesting  to  the  presence  of  an  aesthetic  emotion  attendant  on 
the  mode  in  which  a  truth  is  reached  and  stated.  Modern  physics 
is  full  of  discoveries  containing  some  such  artistic  quality,  e.  g. 
the  grouping  of  the  elements  in  the  proportions  of  their  atomic 
weight  which  Mendelieff  established,  or  Sir  W.  Ramsay's  recent 
discovery  of  the  relations  between  helium  and  its  chemical  kin- 
dred. But  one  need  not  labour  the  analogy  between  artist  and 
scientist.  For  our  main  enquiry  is  into  human  costs,  and  it  will 
be  admitted  that  the  zest  of  the  scientific  student  and  the  joy  of 
discovery  are  emotions  as  vital  and  as  valuable  in  themselves  as 
the  emotions  of  the  artist.  So  far,  then,  as  the  scientist  comes 
within  our  purview  as  a  productive  agent,  his  activity  must  rank 
with  the  artist's,  as  yielding  more  human  utility  than  cost.  It 
may,  however,  be  contended  that  the  man  of  science  seldom, 
as  such,  enters  into  the  field  of  industrial  productivity,  save  when 
he  adds  to  his  scientific  work  the  role  of  inventor.  With  the  ad- 
vent of  the  inventor  the  attainment  of  knowledge  is  bent  to  some 
purpose  of  industrial  utility.  But  though  some  definitely  gainful 
purpose  may  lurk  in  the  inventor's  mind,  it  does  not  commonly 
impose  upon  his  work  the  distinctive  costs  of  labour.  For  inven- 
tion, however  narrowly  utilitarian  in  its  objects  and  results,  still 
remains  in  the  realm  of  creation,  still  yields  the  satisfaction  of  a 
production  that  is  interesting  and  elevating  in  itself.  It  seems 
to  matter  little  whether  the  inventive  process  is  a  large  bold  spec- 
ulative handling  of  some  problem  in  which  the  inventor  is  a 
pioneer,  or  whether  he  is  engaged  upon  the  narrower  task  of 
bringing  the  past  inventions  of  many  greater  minds  up  to  the 
level  of  industrial  utility  by  some  small  new  economy.  The  pro- 
cess of  invention  carries  the  quality  of  interesting  novelty  which 
from  our  standpoint  is  the  badge  of  creative  work.  We  shall, 
doubtless,  be  reminded  at  this  point  that  history  shows  the  path 
of  the  inventor  to  be  almost  as  hard  as  that  of  the  transgressor, 
strewn  with  toil  and  disappointments.  But  though  a  great  hi- 


5o  WORK  AND  WEALTH 

vention,  like  a  great  work  of  art,  often  conceals  an  arduous  and 
painful  gestation  under  the  appearance  of  a  spontaneous  genera- 
tion, too  much  must  not  be  made  of  such  a  cost. 

The  training  of  a  creative  faculty,  though  like  all  training  it 
involves  an  exercise  and  a  discipline  not  pleasing  in  themselves, 
can,  indeed,  scarcely  be  regarded  in  our  sense  as  a  cost  of  labour. 
It  is  a  furtherance  and  not  a  repression  of  personality:  the  prac- 
tice it  involves,  the  technique  it  imparts  are  not  merely  mechani- 
cal aptitudes,  and  they  always  carry  in  them  the  conscious  hope 
of  creative  achievement.  The  education  of  artistic  or  inventive 
faculty  involves  no  real  wear  and  tear  of  human  vitality  beyond 
that  physical  waste  which  every  prolonged  occupation  involves. 
Invention  itself  involves  no  cost.  In  none  of  these  operations  is 
the  characteristic  of  labour  present,  the  giving-out  of  some  single 
sort  of  energy  by  constant  repetition  of  identical  acts  in  a  narrow 
groove  of  endeavour.  Such  acts  of  labour  are  indeed  inimical  to 
invention:  the  act  of  invention  comes  commonly  in  times  of 
leisure.  It  is  the  product  more  of  play  than  of  work,  and  the  ele- 
ment of  instinct,  perhaps  even  of  chance,  is  often  a  factor  of 
success. 

§  5.  M.  Tarde,  in  his  abrupt  contrast  between  creation  and 
imitation  or  labour,  has  dogmatised  upon  the  rarity  of  the  crea- 
tive faculty,  and  certain  other  sociologists  and  politicians  have 
busily  engaged  themselves  in  sowing  fears  lest  the  greed  of  or- 
ganised labour  or  the  rashness  of  socialistic  legislation  should,  by 
robbing  genius  and  ability  of  its  proper  rewards,  tamper  with  the 
springs  of  industrial  progress.  Now,  the  important  question  of 
the  economic  reward  of  ability  and  genius  may  be  deferred  until 
we  have  ascertained  more  clearly  what  part  these  creative  quali- 
ties play  in  all  the  different  modes  of  productive  energy.  But 
the  assumption  that  artistic  and  inventive  faculty  is  exceedingly 
rare,  because  it  has  so  seldom  been  displayed,  must  be  boldly 
challenged.  The  studies  of  modern  psychologists  and  education- 
alists refute  it.  On  the  contrary,  there  is  reason  to  believe  that 
human  nature  is  exceedingly  rich  in  all  sorts  of  variations  from 
the  normal,  and  that  very  many  of  these  variations  have  valua- 
ble uses,  provided  that  suitable  conditions  for  their  discovery, 
training  and  application  are  present. 


_____ — 

THE  CREATIVE  FACTOR  IN  PRODUCTION  51 

The  notion  that  genius,  like  murder,  will  'out'  is  a  false  sen- 
timentalism.  Some  men  of  genius  do,  indeed,  make  their  way 
in  spite  of  adverse  circumstances,  forcing  themselves  out  of  the 
obscurity  of  their  surroundings:  they  'break  their  birth's  invid- 
ious bar,  and  breast  the  blows  of  circumstance,  and  grasp  the 
skirts  of  happy  chance.'  That  is  to  say  some  sorts  of  genius  are 
united  witji  qualities  of  audacity,  persistence,  and  luck,  which 
enable  them  to  win  'through'.  But  how  many  men  of  genius  do 
not  possess  these  faculties  and  therefore  do  not  emerge,  it  is  from 
the  nature  of  the  case  impossible  to  learn.  But  it  is  probable 
that  much  genius,  talent,  and  ability,  capable  of  yielding  fine  so- 
cial service,  is  lost.  Indeed  it  is  probable  that  many  of  the  finest 
human  variations,  involving  unusual  delicacy  of  feeling  and  per- 
haps of  physique,  will  by  natural  necessity  be  incapacitated  for 
making  their  way  and  forcing  recognition  amid  uncongenial 
surroundings. 

It  is  likely  that  far  more  human  genius  is  lost  than  is  saved, 
even  in  the  more  civilised  nations  of  to-day.  For  what  are  the 
conditions  of  the  successful  utilisation  of  genius,  and  for  what  pro- 
portion of  the  population  are  they  securely  attained? 

Leisure  is  a  first  condition  for  all  free  and  fruitful  play  of  the 
mind.  Very  few  inventions  have  come  from  workers  compelled 
to  keep  their  noses  to  the  grindstone,  and  unable  to  let  their  eyes 
and  thoughts  play  freely  round  the  nature  of  their  work.  This 
is  why  slavery  contributed  so  very  little  to  the  development  of 
the  industrial  arts:  this  is  why  so  comparatively  few  inventions 
of  importance  have  been  made  by  hired  labourers  in  this  and 
other  countries.  The  strongest  economic  plea  for  a  shorter  and 
a  lighter  working-day  is  that  it  will  liberate  for  invention  and  in- 
dustrial progress  the  latent  creative  energy  of  countless  workers 
that  is  stifled  under  the  conditions  of  a  long  day's  monotonous 
toil. 

Education  is  the  next  condition.  The  great  mass  of  the  popula- 
tion in  this  country  have  no  such  opportunity  of  education  as  is 
needed  to  discover,  stimulate,  and  nourish  the  creative  faculties 
in  art,  science,  and  industrial  invention.  One  need  not  overrate 
what  even  the  best  education  can  do  for  human  talent  of  the  crea- 
tive order.  Indeed,  the  education  of  the  schools  may  sometimes 


52  WORK  AND  WEALTH 

rather  injure  than  improve  the  finest  faculties.  But  education 
can  do  one  incomparable  service  to  native  genius  or  talent.  By 
putting  the  sensitive  mind  of  a  young  man  or  woman  in  contact 
with  the  innumerable  waves  of  thought  astir  in  the  intellectual 
atmosphere  around,  it  supplies  the  first  essential  of  all  creative 
activity,  the  fruitful  union  of  two  thoughts.  Until  all  the  new 
minds  brought  into  the  world  are  placed  in  such  free  contact  with 
every  fertilising  current  of  thought  and  feeling,  and  enjoy  free, 
full  opportunities  of  knowing  the  best  that  has  been  thought  and 
said  in  all  departments  of  human  knowledge,  we  cannot  tell  how 
much  creative  faculty  perishes  for  lack  of  necessary  nutriment. 

§  6.  From  artistic  and  inventive  work  which  is  essentially 
creative,  enjoyable,  vitally  serviceable  and  costless,  we  proceed 
to  review  the  regular  skilled  mental  work  of  the  professional  and 
administrative  classes. 

The  bulk  of  the  productive  energy  classed  as  Ability  comes 
under  these  heads. 

It  is  evident  that  in  most  of  this  work  the  creative  quality  is 
blended  in  various  degrees  with  imitation  or  routine.  We  pass 
from  the  more  miraculous,  interesting,  and  rapid  modes  of  pro- 
ductive achievement  to  a  lower  level,  where  the  expenditure  of 
time  and  effort  is  greater  and  where  the  terms  'practice'  and 
'practitioner'  themselves  attest  the  more  confined  nature  of  the 
activities.  There  can  be  no  doubt  that  the  practice  of  law  or 
medicine,  even  in  its  highest  walks,  involves  a  good  deal  of  toil- 
some and  almost  mechanical  routine,  though  the  most  successful 
practitioners  generally  shift  the  bulk  of  this  burden  on  to  the 
lower  grades  of  the  profession. 

The  practice  called  'devilling'  in  the  law  illustrates  my  mean- 
ing. But  every  profession  has  its  lower  grades  of  routine  workers, 
assistants,  dispensers,  nurses,  clerks  and  others,  whose  sphere  of 
liberty  is  closely  circumscribed,  and  whose  work,  although  in- 
volving some  qualities  of  personal  skill  and  responsibility,  mainly 
consists  in  carrying  out  orders. 

This  consideration  of  the  subsidiary  professional  services  brings 
to  light,  however,  a  certain  defect  in  the  use  of  the  antithesis 
between  creation  and  imitation,  regarded  as  an  index  of  humanly 
desirable  and  humanly  undesirable  work. 


THE  CREATIVE  FACTOR  IN  PRODUCTION  53 

Mere  repetition  or  close  routine  is  not  the  distinctive  character 
of  much  of  this  work.  The  work  of  a  private  secretary,  clerk, 
or  other  subordinate  to  a  professional  man  or  a  high  official,  may 
contain  much  variety  and  novelty  in  detail  or  even  in  kind.  The 
same  may  be  true  of  the  work  of  a  valet  or  other  personal  attend- 
ant. It  applies  to  all  work  which  consists  in  carrying  out  an- 
other's orders.  There  may  be  plenty  of  variety  and  scope  for 
skill  in  such  work;  in  its  initial  stage,  as  conceived  by  the  chief 
or  employer,  it  may  contain  elements  of  creative  energy.  But 
the  subordinate  does  not  reap  these  elements  of  personal  inter- 
est because  the  initiation  of  the  process  does  not  rest  with  him. 
The  essentials  of  the  work  are  imposed  upon  him  by  the  intellect 
and  will  of  another:  neither  the  design  nor  the  mode  of  execution 
is  his  own.  Though,  therefore,  his  work  may  not  consist  in  mere 
routine,  but  may  be  widely  varied,  the  fact  that  it  is  not  properly 
'his'  work,  the  expression  of  'his'  personality,  deprives  it  of  all 
qualities  of  creation  or  achievement,  save  such  fragments  as 
adhere  to  the  details  that  are  'left  to  him.'  Such  work  may,  in- 
deed, be  described  as  imitative,  in  that  it  consists  in  executing  a 
design  prescribed  to  him  by  another.  But  if  the  term  imitation 
be  required,  as  it  is,  to  designate  the  sort  of  labour  which  consists 
in  constant  repetition  of  a  single  act  or  process,  it  would  be  better 
to  mark  this  distinction  between  free  agent  and  subordinate  in 
a  different  way.  The  subordination  of  the  secretary  or  the  clerk 
involves  the  human  cost  of  a  surrender  of  his  personal  judgment 
and  initiative.  To  the  extent  that  he  does  this,  he  becomes  an 
instrument  of  another's  will.  The  extent  to  which  this  involves 
a  human  cost  will  vary  greatly  with  the  particular  conditions, 
technical  or  personal.  Where  such  subordination  belongs  to 
genuine  education  or  apprenticeship,  or  where  close  sympathy 
and  mutual  understanding  happen  to  exist  between  superior  and 
subordinate,  so  that  the  mind  of  one  is  the  mind  of  both,  no  hu- 
man cost  at  all  but  a  human  utility  may  emerge.  Or,  in  other 
cases,  the  technical  nature  of  the  work  may  involve  the  necessity 
of  leaving  to  the  subordinate  a  good  deal  of  discretion  and  a  cor- 
respondingly large  field  for  personal  expression.  But  where  the 
subordinate  becomes  the  mere  tool  of  his  master,  a  heavy  cost  is 
entailed.  That  cost  is  heavier  indeed  than  in  ordinary  manual 


54  WORK  AND  WEALTH 

routine  labour,  because  it  involves  more  directly  the  subordina- 
tion of  the  mind  and  will  of  the  worker.  Part  of  the  distaste  for 
domestic  and  other  closely  personal  service  is  due  to  the  closer 
bondage  of  the  whole  personality  that  is  involved  in  the  relation. 
It  is  not  so  much  that  the  work  is  intrinsically  dull  or  unpleasant 
as  that  it  encroaches  upon  personality  and  inhibits  initiative 
and  achievement. 

§  7.  The  work  of  the  highest,  most  honoured  and  best  remuner- 
ated members  of  the  professions  retains  essentially  the  quality 
of  personal  achievement.  It  consists  of  a  number  of  detached 
and  usually  brief  acts  of  intellectual  skill,  the  formation  of  a  judg- 
ment upon  the  meaning  or  merits  of  a  complicated  case,  the  pres- 
entation of  that  judgment  in  advice  or  argument,  the  bringing 
intellectual  and  moral  influences  to  bear  upon  some  line  of  con- 
duct. 

In  some  instances,  as  in  the  argument  of  a  difficult  case  in 
court,  or  the  conduct  of  a  complicated  Bill  in  Parliament,  pro- 
longed and  arduous  exertion,  both  mental  and  physical,  may  be 
involved.  Even  where  the  separate  acts  require  no  prolonged 
output  of  energy,  a  professional  career,  comprising  long  series 
of  such  acts,  may  strain  or  exhaust  the  mental  and  physical  re- 
sources even  of  a  strong  man.  Though  each  case  will  be  different, 
and  will  call  for  qualities  of  personal  skill  and  judgment,  inter- 
esting and  agreeable  in  their  exercise,  all  will  fall  within  the  limits 
of  a  special  line  of  practice,  and  this  specialism  will  wear  upon  the 
nervous  system,  bringing  the  activity  under  an  economy  of  costs. 
The  temptations  of  a  busy  and  successful  professional  career  in- 
sidiously sap  the  interest  and  joy  which  attend  the  earlier  strug- 
gle, unless  a  man  has  the  rare  wisdom  and  the  strength  of  will 
to  limit  his  amount  of  work  and  income. 

What  is  said  here  of  the  competitive  professions  is  in  large 
measure  applicable  to  the  official  grades  of  the  public  services. 
The  higher  sorts  of  official  work  continually  involve  qualities  of 
judgment  and  imagination,  and  there  is  little  mere  repetition. 
As  one  descends  to  the  lower  official  levels,  the  routine  or  repeti- 
tive element  increases,  until  one  reaches  a  sort  of  official,  the 
liberty,  initiative,  skill,  and  interest  of  whose  work  hardly  exceeds 
that  of  the  ordinary  machine-feeder  in  a  factory.  In  all  such  dis- 


THE  CREATIVE  FACTOR  IN  PRODUCTION     55 

tinctively  routine  work  there  is  a  heavy  mental  and  even  physi- 
cal cost.  But  there  is  this  distinction  between  the  case  of  the 
official  and  of  the  professional  man.  The  former  is  not  subject 
to  the  constant  drive  of  the  competitive  system  and  is  usually 
relieved  from  the  sense  of  insecurity  and  anxiety  which  wears 
upon  the  mind  of  most  professional  men. 

§  8.  The  psychology  of  the  entrepreneur  or  business  man  is 
one  of  great  interest  and  complexity.  If  we  take  the  ordinary 
activities  of  the  manager  of  a  well-established  business  in  a  staple 
trade,  they  do  not  seem  to  involve  much  in  the  way  of  high  in- 
tellectual skill,  imagination,  or  exploit — but  merely  a  limited 
amount  of  special  trade  knowledge,  ordinary  intelligence,  and 
common  sense.  He  has  to  perform  a  number  of  little  acts  of  cal- 
culation and  decision.  What  we  call  his  character,  viz.  honesty, 
reliability,  sense  of  responsibility,  really  counts  for  more  than 
intellect:  there  is  little  demand  for  constructive  or  creative  im- 
agination, or  for  high  enterprise.  The  conduct  of  such  a  business, 
even  on  the  part  of  its  manager,  though  not  destitute  of  interest- 
ing incident,  involves  a  good  deal  of  dull  routine  and  even  drudg- 
ery which  carries  a  distinct  'cost'  in  mental  wear  and  tear. 

The  subordinate  officials  in  such  business  are,  of  course,  sub- 
jected to  a  closer  routine,  though  never  to  a  merely  mechanical 
repetition,  and  their  working  life  is  less  affected  by  hopes  and 
fears  relating  to  the  profits  or  loss  on  the  half-year's  working. 

But  a  large  proportion  of  business  men  work  under  very  dif- 
ferent conditions  from  these. 

Most  industries  to-day  are  subjected  to  rapid  changes  in  re- 
gard to  instruments  and  methods  of  work,  markets  for  materials 
and  for  finished  products,  wages  and  conditions  of  employment. 
A  keen  eye  for  novelties,  a  rapid  judgment,  long-sighted  calcu- 
lation, commanding  character,  courage  in  undertaking  risks — 
these  are  leading  notes  in  the  modern  business  life. 

The  business  man  who  constructs,  enlarges,  and  conducts  a 
modern  competitive  business,  performs  a  good  many  functions 
which  call  for  various  mental  and  moral  qualities.  He  must  plan 
the  structure  of  his  business — determine  its  size,  the  sizes  and  sorts 
of  premises  and  plant  he  will  require,  the  place  which  he  can  best 
occupy;  he  must  get  reliable  managers  and  assistants,  and  a  good 


56  WORK  AND  WEALTH 

supply  of  skilled  labour  of  various  kinds.  He  must  watch  markets 
and  be  a  master  of  the  arts  of  buying  and  selling:  he  must  have 
tact  in  managing  employees  and  a  quick  eye  for  improvements  in 
methods  of  production  and  of  marketing:  he  must  be  a  practical 
financier,  and  must  follow  the  course  of  current  history  so  far  as 
it  affects  trade  prospects. 

If  we  take  the  most  generalised  type  of  modern  business  man, 
the  financier  who  directs  the  flow  of  capital  into  its  various  chan- 
nels, or  the  capitalist  who  lives  by  managing  his  investments, 
we  find  the  business  ability  in  its  most  refined  form.  For  these 
men  are  the  general  directors  of  economic  energy,  operating 
through  joint  stock  enterprise. 

The  human  costs  of  this  work  of  speculation  and  direction 
are  difficult  to  assess.  Such  terms  as  labour  and  industry  are 
alien  from  the  atmosphere  of  these  high  economic  functions. 
At  the  same  time  the  strain  of  excitement,  and,  at  certain  seasons, 
of  prolonged  intellectual  effort  and  attention,  the  sense  of  re- 
sponsibility for  critical  decisions,  involve  a  heavy  nervous  wear 
and  tear.  Probably  the  heaviest  human  cost,  however,  is  a  cer- 
tain moral  callousness  and  recklessness  involved  in  the  financial 
struggle.  For  the  paper  symbols  of  industrial  power,  which 
financiers  handle,  are  so  abstract  in  nature  and  so  remote  from 
the  human  fates  which  they  direct,  that  the  chain  of  causation 
linking  stocks  and  shares  with  human  work  and  human  life  is 
seldom  realised.  How  should  the  temporary  holder  of  a  block  of 
shares  in  Peruvian  rubber  concern  himself  with  the  conditions 
of  forced  labour  in  the  Amazon  forests,  or  the  group  formed  to 
float  a  foreign  government  loan  consider  the  human  meaning  of 
the  naval  policy  it  is  intended  to  finance?  Except  in  so  far  as 
they  affect  the  values  of  their  holdings  and  the  price  at  which  they 
can  market  the  shares,  the  human  significance  of  the  business  or 
political  enterprises  which  are  concrete  entities  behind  finance, 
has  no  meaning  for  them.  These  men  and  their  economic  ac- 
tivities are  further  removed  from  human  costs  and  utilities  than 
any  other  sort  of  business  men.  In  view  of  the  immense  human 
consequences  which  follow  from  their  conduct  this  aloofness  is  a 
demoralising  condition. 

So  occult  and  so  suspect  are  many  of  the  operations  of  financiers 


THE  CREATIVE  FACTOR  IN  PRODUCTION  57 

as  somewhat  to  obscure  the  importance  of  the  actual  economic 
services  they  render  to  our  industrial  system.  General  finance 
is  the  governor  of  the  economic  engine:  it  distributes  economic 
power  among  the  various  industries,  allocating  the  capital  of  the 
saving  classes  to  road-making,  irrigation,  mining,  the  equipment 
of  new  cities,  the  establishment  of  staple  manufactures,  and  the 
supply  of  financial  resources  for  various  purposes  of  government. 
The  finest  business  instincts,  the  most  rapid,  accurate,  and  com- 
plex powers  of  inference  and  prophecy,  the  best  balance  of  au- 
dacity and  caution,  the  largest  and  best-informed  imagination, 
are  needed  for  this  work  of  general  finance.  It  is  intensely  in- 
teresting, and  exerts  a  fascination  which  is  traceable  to  a  combi- 
nation of  appeals.  The  chief  field  for  high  economic  adventure, 
it  evokes  most  fully  the  combative  qualities  of  force  and  cunning; 
it  is  full  of  hazard  and  fluctuation,  with  large,  rapid  gains  and 
losses:  it  neither  requires  nor  permits  close  personal  contact  with 
the  troublesome  or  sordid  details  of  industrial  or  commercial 
life. 

Such  is  the  work  of  the  financier  and  the  skilled  investor, 
who  found  capitalistic  enterprises  and  deal  in  their  stocks  and 
shares  over  the  whole  area  of  the  industrial  world.  It  is  the  most 
intellectual  and,  in  one  sense,  the  most  'moral'  of  business  ac- 
tivities, involving  at  once  the  finest  arts  of  calculation  and  the 
fullest  faith  in  human  nature. 

For  finance  is  most  closely  linked  with  credit,  and  credit  is 
only  the  business  name  for  faith.  When  people  talk  of  finance 
as  if  it  were  riddled  with  dishonesty,  facts  give  them  the  lie. 
The  normal  honesty  of  finance  is  proved  by  the  fact  that  larger 
and  larger  numbers  of  men  and  women  in  every  country  of  the 
civilised  world  are  coming  to  entrust  their  savings  more  and  more 
to  men  who  are  personal  strangers,  for  investment  in  distant 
countries  and  in  businesses  the  exact  nature  of  which  is  unknown 
to  them,  and  over  which  they  cannot  hope  to  exercise  an  appre- 
ciable control.  The  working  of  the  machinery  of  modern  invest- 
ment by  which  millions  of  men  in  England,  France,  and  Germany 
have  sent  their  savings  to  make  railways  in  S.  America,  or  to 
open  up  mines  in  S.  Africa,  or  to  build  dams  in  Egypt,  is  the 
largest  tangible  result  of  modern  education  that  can  be  adduced. 


58  WORK  AND  WEALTH 

It  implies  the  intellectual  and  moral  cooperation  of  larger  num- 
bers of  distinct  personalities  across  wider  local  and  national 
barriers  than  has  ever  occurred  before  in  the  history  of  the  world. 

§  9.  A  reasonable  faith  hi  the  future  and  a  willingness  to  run 
some  risk  are  complementary  motives  in  this  growth  of  financial 
investment.  They  are,  however,  by  no  means  confined  to  opera- 
tions of  finance.  All  industry  involves  faith  and  risk-taking. 
Every  producer  who  acts  as  a  free  agent  conceives  some  good 
object  which  he  thinks  attainable  by  his  work.  He  may  be  mis- 
taken, either  in  conceiving  wrongly,  or  in  failing  to  carry  out  his 
plan.  His  failure  may  be  due  to  want  of  skill  or  knowledge,  or 
to  adverse  circumstances.  In  primitive  societies,  where  a  man 
produces  mostly  for  his  own  use,  the  risk  is  less.  For  he  may  be 
supposed  to  know  what  he  wants,  how  much,  and  when  he  wants 
it.  But  when  he  makes  for  others,  i.  e.  for  a  market,  the  risks  are 
greater.  For  he  will  not  know  so  much  about  the  wants  of  other 
persons  as  about  his  own.  It  might  seem  as  if  small  local  mar- 
kets, in  which  the  producer  dealt  exclusively  with  neighbours, 
would  carry  the  least  risk,  and  that  the  risk  would  expand  with 
each  expansion  of  the  market  area.  But  this  is  not  commonly 
the  case.  As  a  rule,  there  is  less  risk  for  the  producer  serving 
a  large  market,  the  individual  members  of  which  he  does  not 
know,  than  a  small  market  of  his  neighbours.  For  the  fluctua- 
tions of  aggregate  demand  will  be  smaller  in  the  larger  market, 
and  though  he  will  know  less  about  the  individual  contributions 
to  its  supply  and  its  demand,  his  risk  of  failing  to  effect  a  sale, 
when  he  desires  to  do  so,  will  usually  be  less.  This  at  any  rate 
applies  to  most  standard  trades. 

Since  effective  access  to  large  markets  implies  a  fairly  large 
business,  the  economy  of  risk  becomes  one  of  the  economies  of 
capitalism,  and  its  calculation  a  chief  branch  of  the  employer's 
skill.  The  watching  of  the  market  so  as  to  reduce  the  waste  of 
misdirected  production  is  the  most  delicate  of  the  intellectual 
activities  of  most  managers.  It  takes  him  outside  the  scope  of 
his  own  business  and  the  present  process  of  production,  to  con- 
sider the  whole  condition  of  the  trade  in  the  present  and  the 
probable  future.  These  calculations  and  acts  of  judgment  issu- 
ing from  the  brain  of  business  managers  are  the  psychical  aspect 


THE  CREATIVE  FACTOR  IN  PRODUCTION    59 

of  the  whole  structure  of  markets  and  of  the  trade  and  traffic 
arrangements  which  give  such  unity  and  order  as  are  visible  in 
what  is  termed  the  industrial  system. 

Thus,  not  merely  on  the  financial  but  on  the  commercial  side, 
industry  is  perceived  to  be  a  great  fabric  of  beliefs  and  desires. 
Though,  as  we  shall  recognise,  in  dealing  with  labour,  and  with 
saving,  risk-taking  is  by  no  means  confined  to  employers  and 
entrepreneurs,  its  wider  operations  belong  to  the  speculative 
skill  which  comes  under  the  general  head  of  ability  of  manage- 
ment. In  the  psychological  interpretation  of  industry  this  func- 
tion of  the  entrepreneur  is  of  quite  crucial  significance,  cooperat- 
ing everywhere  with  the  more  abstract  calculations  of  financiers 
in  directing  the  amounts,  kinds,  and  directions,  of  the  various 
currents  of  industrial  energy  which  move  in  the  business  world. 
Since  it  involves  a  constant  use  of  the  constructive  imagination 
in  the  interpretation  of  the  play  of  changing  motives  in  many 
minds,  and  the  forecasting  of  future  conditions  which  can  never 
be  a  mere  repetition  of  the  past,  the  'creative'  faculty  obtains 
here  its  highest  expression.  It  is  not  for  nothing  that  the  great 
modern  master  either  of  finance  or  industry  is  accredited  with 
some  quality  of  imaginative  power  akin  to  that  of  the  artist. 
This,  however,  must  in  not  a  few  instances  imply,  not  merely 
the  genius  of  the  prophet,  but  that  of  the  skilled  manipulator 
of  economic  material  and  opportunity,  who  helps  to  secure  the 
due  fulfilment  of  the  prophecies  upon  which  he  stakes  his  faith. 


CHAPTER  V 

THE  HUMAN  COSTS   OF   LABOUR 

§  i.  The  classical  Political  Economy  of  this  country  gave  to 
Labour  a  role  of  supreme  importance  in  the  production  of  wealth. 
From  Adam  Smith,  Ricardo,  and  other  authoritative  exponents 
of  the  new  'science'  many  passages  can  be  cited  to  support  the 
thesis  that  labourers  are  the  only  producers.  Nor  does  it  appear 
that  in  these  utterances  Labour  was  usually  intended  to  include 
the  services  of  organisation  and  management  or  other  intellect- 
ual activities.  Wealth  is  baldly  attributed  to  Labour  in  the  sense 
that  the  manual  labour,  which  extracts  raw  materials  from  the 
earth,  shapes  and  composes  them,  and  carries  them  from  one 
place  to  another,  alone  counts  as  a  cost  of  production.  It  is 
natural  enough  that  the  scientific  socialism  of  Europe  should  have 
accepted  and  enforced  this  doctrine.  Though  the  more  intelligent 
socialists  and  'labour  men'  admit  the  necessary  work  of  super- 
intendence and  other  mental  work  as  useful  and  productive,  the 
materialism  prevalent  in  the  business  world  tends  to  relegate  to 
a  quite  secondary  place  all  the  higher  forms  of  intellectual  and 
moral  activity. 

It  was  upon  the  whole,  indeed,  a  sound  instinct  which  thus  led 
the  early  theorists  to  use  language  which  attributed  to  manual 
labour  the  real  burden  of  the  'costs'  of  production.  For  closer 
investigation  attests  the  force  of  the  distinction  between  the  pro- 
ductive energy  given  out  by  the  intellectual,  the  directing,  and 
administrative  classes  on  the  one  hand,  and  by  the  labouring- 
classes  on  the  other.  Moreover,  the  social  as  well  as  the  eco- 
nomic cleavage  is  so  distinctive  a  feature  of  our  life  that  it  would 
be  inconvenient  to  ignore  it.  The  cleavage  will  be  found  to 
correspond  pretty  accurately  to  the  distinction  between  the 
creative  and  the  imitative  functions  which  we  provisionally 
adopted  for  a  starting  point  in  our  analysis. 

60 


THE  HUMAN  COSTS  OF  LABOUR  61 

For  most  of  the  productive  energy  given  out  by  the  artistic, 
inventive,  professional,  official,  and  managerial  classes,  which 
have  passed  under  our  survey,  is  seen  to  be  in  large  measure  crea- 
tive, varied,  interesting,  and  pleasurable. 

Now  in  the  labour  of  the  wage-earning  classes  these  qualities 
are  generally  lacking.  Alike  in  motives  and  in  methods,  the  con- 
trast is  clearly  marked.  The  mind  of  the  artist  or  the  inventor, 
even  of  the  professional  man  or  the  administrator,  is  occupied 
with  the  work  in  hand,  as  an  object  of  interest  and  of  desirable 
achievement.  The  nature  of  the  work  and  the  conditions  of  re- 
muneration conduce  to  fix  his  immediate  thoughts  and  feelings 
on  the  performance  of  his  work.  With  the  labourer  it  is  different. 
The  conditions  of  most  labour  are  such  that  the  labourer  finds 
little  scope  for  thought  and  emotional  interest  in  the  work  itself. 
Its  due  performance  is  hardly  an  end  to  him,  but  only  a  means 
to  a  livelihood  consisting  in  the  consumable  commodities  got  in 
payment  for  his  labour. 

But  the  vital  distinction  is  in  the  nature  and  method  of  the 
work  done.  Whereas  the  artistic  or  inventive,  or  even  the  pro- 
fessional man,  is  constantly  doing  something  new,  the  labourer 
continually  repeats  the  same  act  or  set  of  acts,  in  order  to  produce 
a  number  of  similar  products.  The  success  of  most  labour  con- 
sists in  the  exactitude  and  pace  with  which  this  repetition  can 
be  carried  on.  The  machine-tender  is  the  typical  instance.  To 
feed  the  same  machinery  with  the  same  quantity  of  the  same 
material  at  the  same  pace,  so  as  to  turn  out  an  endless  number  of 
precisely  similar  articles,  is  the  absolute  antithesis  of  art.  It  is 
often  said  that  the  man  who  feeds  such  a  machine  tends  to  be- 
come as  automatic  as  the  machine  itself.  This,  however,  is  but  a 
half-truth.  If  the  tender  could  become  as  automatic  as  the  ma- 
chine he  tended,  if  he  could  completely  mechanise  a  little  section 
of  his  faculties,  it  might  go  easier  with  him.  But  the  main  trend 
of  life  in  the  man  fights  against  the  mechanising  tendency  of  his 
work,  and  this  struggle  entails  a  heavy  cost.  For  his  machine  im- 
poses a  repetition  of  the  same  muscular  and  nervous  action  upon 
a  being  whose  muscles  and  nervous  resources  are  continually 
changing.  The  machine,  fed  constantly  with  the  same  supply  of 
fuel,  geared  up  to  a  single  constant  pace  of  movement,  forced  by 


62  WORK  AND  WEALTH 

unchanging  structure  to  the  performance  of  the  same  operation, 
friction  and  error  reduced  to  an  almost  negligible  minimum,  works 
through  the  longest  day  with  a  uniform  expenditure  of  power. 
The  machine-tender  is  an  organism,  fed  at  somewhat  irregular 
intervals  with  different  amounts  and  sorts  of  food,  the  assimila- 
tion of  which  is  also  discontinuous,  and  incapable  of  maintaining 
intact  and  constant  in  its  quantity  the  muscular  and  nervous 
tissue  and  the  accompanying  contractions  which  constitute  the 
physical  supply  of  'work'.  This  organism  has  also  many  other 
structures  and  functions,  physical  and  mental,  whose  activities 
and  needs  get  in  the  way  of  the  automatic  activity  of  machine- 
tending.  Thus  the  worker  cannot  succeed  in  becoming  alto- 
gether a  machine-tending  automaton.  He  will  not  always  ex- 
actly repeat  himself,  and  his  attempt  to  do  so  involves  two  sets 
of  organic  costs  or  wastes,  due  to  the  fact  that,  though  his  labour 
tries  to  make  him  a  specialised  mechanism,  he  remains  a  general- 
ised organism. 

So  far  as  labour  consists  in  specialised  routine,  absorbing  the 
main  current  of  productive  energy,  it  is  the  enemy  of  organic 
health.  It  is  hostile  in  two  ways,  first,  in  denying  to  man  op- 
portunity for  the  exercise  of  his  other  productive  faculties,  sec- 
ondly, in  overtaxing  and  degrading  by  servile  repetition  the 
single  faculty  that  is  employed. 

As  the  artist  presents  the  supreme  example  of  creative  work, 
with  a  minimum  of  human  costs  and  a  maximum  of  human 
utility,  so  the  machine-tender  presents  the  supreme  example  of 
imitative  work,  with  a  maximum  of  human  costs  and  a  minimum 
of  human  utility. 

§  2.  Some  particular  consideration  of  these  costs  of  machine- 
tending  will  be  the  best  approach  to  a  more  general  survey  of 
the  human  costs  of  labour. 

The  indictment  of  the  dominion  of  machinery  by  Ruskin, 
Morris,  and  other  humanist  reformers,  was  primarily  based  upon 
the  degradation  of  the  worker's  manhood  by  denying  him  the 
conditions  of  good  work.  'It  is  a  sad  account,'  said  Ruskin, 
'for  a  man  to  give  of  himself  that  he  has  spent  his  life  in  opening 
a  valve,  and  never  made  anything  but  the  eighteenth  part  of  a 
pin.'  But,  important  as  is  this  charge  of  degraded  and  joyless 


THE  HUMAN  COSTS  OF  LABOUR  63 

work,  we  must  begin  our  analysis  of  the  costs  of  mechanical  or 
factory  labour  at  a  lower  level. 

From  the  great  body  of  the  factory  labour  which  goes  to  the 
provision  of  our  national  income,  the  first  great  human  cost  that 
emerges  is  the  burden  of  injurious  fatigue  which  results  from 
muscular  or  nervous  overstrain,  and  from  the  other  physical  and 
moral  injuries  which  are  the  natural  accompaniments  of  this 
overstrain. 

Modern  physiology  and  pathology  have  done  much  to  give 
plain  meanings  to  these  costs.  Physical  fatigue  is  not  of  necessity 
an  injury  to  the  body,  nor  is  all  feeling  of  fatigue  a  pain.  The 
ideally  correct  conduct  of  the  organism  may,  indeed,  appear  to 
preserve  an  exact  and  a  continuous  balance  between  the  anabolic 
and  the  catabolic,  the  nutrition  of  cell  life  and  the  expenditure  in 
function.  Sir  Michael  Foster  gives  the  following  classical  descrip- 
tion of  this  process.1 

'Did  we  possess  some  optic  aid  which  should  overcome  the 
grossness  of  our  vision,  so  that  we  might  watch  the  dance  of  atoms 
in  this  double  process  of  making  and  unmaking  in  the  human 
body,  we  should  see  the  commonplace  living  things  which  are 
brought  by  the  blood,  and  which  we  call  the  food,  caught  up  into 
and  made  part  of  the  molecular  whorls  of  the  living  muscle, 
linked  together  for  awhile  in  the  intricate  figures  of  the  dance  of 
life;  and  then  we  should  see  how,  loosing  hands,  they  slipped  back 
into  the  blood,  as  dead,  inert,  used-up  matter.  In  every  tiny 
block  of  muscle  there  is  a  part  which  is  really  alive,  there  are  parts 
which  are  becoming  alive,  there  are  parts  which  have  been  alive 
but  are  now  dying  or  dead;  there  is  an  upward  rush  from  the  life- 
less to  the  living,  a  downward  rush  from  the  living  to  the  dead. 
This  is  always  going  on,  whether  the  muscle  be  quiet  and  at  rest, 
or  whether  it  be  active  and  moving.  Some  of  the  capital  of  living 
material  is  always  being  spent,  changed  into  dead  waste,  some  of 
the  new  food  is  always  being  raised  into  living  capital. 

'Thus  nutritive  materials  are  carried  by  the  blood  to  the 
tissues,  and  the  dead  materials  of  used-up  and  broken-up  tissues 
are  carried  away  for  destruction  or  ejection.  Under  normal  con- 
ditions of  healthy  activity  this  metabolic  balance  is  preserved 
1  Weariness,  the  Rede  Lecture,  Cambridge,  1893. 


64  WORK  AND  WEALTH 

by  the  alternation  of  work  and  repose,  the  tissue  and  energy  built 
up  out  of  food  during  periods  of  rest  forming  a  fund  for  expendi- 
ture during  periods  of  work,  while  the  same  periods  of  rest  enable 
the  destructive  and  evacuative  processes  to  get  rid  of  any  accu- 
mulation of  dead  tissue  due  to  the  previous  period  of  work.  Ab- 
normally intense  or  unduly  prolonged  activity  of  any  portion  of 
the  body  uses  up  tissue  so  fast  that  its  dead  material  cannot  be 
got  rid  of  at  the  proper  pace.  It  accumulates  in  the  blood  or  in 
the  kidneys,  liver  or  lungs,  and  operates  as  a  poison  throughout 
the  whole  system.  Over-fatigue  thus  means  poisoning  the  or- 
ganism. 

'The  poisons  are  more  and  more  heaped-up,  poisoning  the 
muscles,  poisoning  the  brain,  poisoning  the  heart,  poisoning  at 
last  the  blood  itself,  starting  in  the.  intricate  machinery  of  the 
body  new  poisons  in  addition  to  themselves.  The  hunted  hare, 
run  to  death,  dies  not  because  he  is  choked  for  want  of  breath, 
nor  because  his  heart  stands  still,  its  store  of  energy  having  given 
out,  but  because  a  poisoned  blood  poisons  his  brain,  poisons  his 
whole  body.' l 

The  Italian  biologist  Mosso  has  demonstrated  that  the  depress- 
ing effect  of  fatigue  is  not  confined  to  the  local  centre  where  it  is 
produced,  but  is  carried  to  all  parts  of  the  body.  When  the  blood 
of  a  dog  fatigued  by  continued  running  is  injected  into  the  vessels 
of  a  sound  dog,  the  latter  exhibits  all  the  signs  of  fatigue.  The 
inability  of  the  system  to  dispose  of  the  used-up  tissue,  which 
thus  accumulates  and  poisons  the  system,  is  one  injurious  factor 
in  fatigue.  Another  is  the  undue  depletion  of  the  stores  of  gly- 
cogen  and  oxygen,  which  the  organism  provides  for  the  output 
of  muscular  activity.  Glycogen  is  a  compound  of  carbon,  hydro- 
gen, and  oxygen  made  by  muscle  tissue  out  of  the  sugar  or  dex- 
trine supplied  to  it  by  the  blood.  'The  stored  glycogen  of  the 
muscles  keeps  uniting  chemically  with  the  oxygen  of  the  blood. 
The  glycogen  is  broken  down  into  a  simpler  chemical  form,  giv- 
ing off  the  gas  carbon  dioxide  and  other  acid  wastes,  and  releasing 
heat  and  mechanical  energy  in  the  process.  With  the  released 
energy  contraction  of  the  muscles  takes  place  and  hence  ulti- 
mately the  industrial  labour  which  is  our  special  theme.' 2 

1  Foster.  Op.  cit.  z  Goldmarck,  Fatigue  and  Efficiency,  p.  22. 


THE  HUMAN  COSTS  OF  LABOUR  65 

'Glycogen  is,  as  it  were,  stored  for  use.  It  is  always  being 
replenished,  always  being  depleted.  .  .  .  But  when  the  muscle  is 
active  and  contracts  energetically,  there  is  a  run  upon  our  gly- 
cogen.  It  is  used  up  faster  than  it  is  built  in  muscle.  The  glyco- 
gen  is  spent  so  rapidly  that  there  is  not  time  for  the  blood-stream 
to  bring  back  to  the  tissue  the  potential  material  for  its  repair.'  * 
Though  the  liver  furnishes  an  extra  store  of  glycogen,  this  too 
may  be  depleted  by  undue  muscular  activity. 

'Thus  we  have  reached  the  other  fundamental  factor  in  fa- 
tigue— the  consumption  of  the  energy-yielding  substance  itself. 
Not  only  does  tissue  manufacture  poison  for  itself  in  the  very  act 
of  living,  casting  off  chemical  wastes  into  the  circling  blood- 
stream; not  only  are  these  wastes  poured  into  the  blood  faster 
with  increased  exertion,  clogging  the  muscle  more  and  more  with 
its  own  noxious  products;  but,  finally,  there  is  a  depletion  of  the 
very  material  from  which  energy  is  obtained.  The  catabolic  proc- 
ess is  in  excess  of  the  anabolic.  In  exhaustion,  the  organism  is 
forced  literally  to  "use  itself  up".' 2 

§  3.  So  much  for  the  physiological  meaning  of  muscular  fa- 
tigue. Closely  associated  with  muscular  fatigue  is  nervous  fa- 
tigue. For  every  voluntary  muscular  action  receives  its  stimulus 
from  a  nervous  centre.  Though  the  nature  of  this  nervous  energy, 
accumulated  in  the  central  nervous  system  and  distributed  in 
stimuli,  is  not  well  understood,  its  economy  is  gravely  disturbed 
by  conduct  involving  heavy  muscular  fatigue,  as  well  as  by  work 
of  a  mental  kind  involving  heavy  drains  on  its  resources.  A  pro- 
cess of  building  up,  storage,  and  dissipation  of  nerve  tissue  and 
energy-yielding  material,  corresponding  to  that  which  we  have 
traced  for  muscle  tissue,  must  be  accepted  as  taking  place.  Fa- 
tigue of  the  nervous  system  will  thus  be  attended  by  a  similar 
accumulation  of  poisonous  waste  products,  and  an  excessive  con- 
sumption of  substances  needed  for  the  maintenance  of  nervous 
activity. 

Though  physiologists  are  not  agreed  as  to  how  and  when 
fatigue  acts  on  the  nervous  cells,  there  is  no  question  of  the  real- 
ity and  of  the  importance  of  this  injury  of  excessive  work  to 
'the  administrative  instrument  of  the  individual'  which  'directs, 
1  Goldmarck,  p.  22.  *  Ibid,  p.  23. 


66  WORK  AND  WEALTH 

controls  and  harmonises  the  work  of  the  parts  of  the  organic 
machine  and  gives  unity  to  the  whole.' 

Still  confining  our  attention  to  purely  physical  conditions,  we 
learn  that  work  done  in  a  state  of  muscular  fatigue  involves  an 
increase  of  nervous  effort. 

'Mosso  showed  that  a  much  stronger  electric  stimulus  is  re- 
quired to  make  a  wearied  muscle  contract  than  one  which  is 
rested.  He  devised  an  apparatus,  the  ponometer,  which  records 
the  curve  of  nervous  effort  required  to  accomplish  muscular  ac- 
tion as  fatigue  increases.  He  showed  that  the  nerve  centres 
are  compelled  to  supply  an  ever  stronger  stimulus  to  fatigued 
muscles.' 1 

Professor  Treves  at  Turin  throws  further  light  upon  the  rela- 
tions between  the  muscular  and  the  nervous  economy.  It  is  well 
known  that  in  muscular  activity  there  is  an  opening  period  dur- 
ing which  efficiency,  or  practical  response  to  nervous  stimulus, 
increases.  Before  fatigue  begins  to  set  in,  the  muscle  appears  to 
gain  strength,  its  working  power  being  actually  augmented.  This 
period  of  maximum  efficiency  continues  for  an  appreciable  time, 
then  fatigue  advances  more  and  more  until  muscular  contraction 
refuses  any  longer  to  respond  to  even  a  heightened  nervous  stim- 
ulus. This,  of  course,  is  also  an  epitome  of  the  course  of  organic 
life  itself,  its  rise  towards  maturity,  its  level  of  maximum  power 
and  its  decline. 

Now  training  or  practice  can  notoriously  affect  this  natural 
economy.  The  muscular  system,  or  some  part  of  it,  can  by  prac- 
tice accommodate  itself  to  increasing  quantities  of  fatigue-poisons, 
and  can  draw  from  the  general  organic  fund  a  larger  quantity  of 
material  for  repair  of  local  muscular  tissue  and  energy.  But  it 
has  long  been  recognised  that  some  real  dangers  attach  to  this 
excessive  specialisation  of  muscular  activities.  The  pathological 
nature  of  over-training  in  athletics  has  its  plain  counterpart  in 
industry.  This,  according  to  Professor  Treves,  lies  in  the  failure 
of  the  supply  of  nervous  energy  to  rise  in  proportion  to  the  re- 
quirements for  this  higher  pressure  upon  the  muscular  tissues. 

'According  to  my  experience,  it  has  not  been  found  that  train- 
ing has  as  favourable  an  effect  upon  [nervous]  energy  as  upon 

1  Goldmarck,  p.  33. 


THE  HUMAN  COSTS  OF  LABOUR  67 

muscular  strength.  .  .  .  This  fact  explains  why  muscular 
training  cannot  go  beyond  certain  limits  and  why  athletes  are 
often  broken  down  by  the  consequences  of  over-exertion.  And 
this  fact  teaches  also  the  practical  necessity  of  preventing  women, 
children,  and  even  adult  men  from  becoming  subjected  to  labour, 
which,  indeed,  a  gradual  muscular  training  may  make  possible, 
but  at  the  price  of  an  excessive  loss  of  nervous  energy  which  is 
not  betrayed  by  any  obvious  or  immediate  symptoms,  either  ob- 
jective or  subjective.' l 

A  series  of  experiments  has  been  directed  to  the  more  detailed 
study  of  the  relations  between  activity  and  repose.  Their  general 
result  is  to  prove  that  muscular  work,  done  after  fatigue  has  set 
in,  not  only  costs  more  nervous  effort  but  accomplishes  less  work. 
The  ergograph,  an  instrument  for  measuring  work,  yields  ample 
testimony  to  the  recuperative  effect  of  rest  taken  before  exhaus- 
tion is  reached,  on  the  one  hand,  and  the  rapid  rate  of  decline  in 
achievement  when  activity  is  continued  after  the  fatigue  point 
has  been  reached. 

§  4.  To  this  account  of  the  physical  costs  of  excessive  work  in 
muscular  and  nervous  waste  must  be  added  the  greater  liability 
to  accidents  and  the  greater  susceptibility  to  industrial  and  non- 
industrial  diseases  which  fatigue  entails. 

The  statistics  of  industry  in  various  countries  prove  that  fa- 
tigue is  a  very  important  factor  in  industrial  accidents.  Though 
fatigue  is  not  always  proportionate  to  duration  of  work,  the  num- 
ber of  hours  worked  without  intermission  is  usually  a  valid  index 
of  fatigue.  After  a  long  stunt  of  work  the  attention  of  the  worker 
and  his  muscular  control  are  both  weakened.  We  find,  therefore, 
a  marked  similarity  in  the  curves  relating  accidents  to  hours  of 
labour,  accidents  increasing  progressively  up  to  the  end  of  the 
morning's  work,  and  again  in  the  late  afternoon  as  the  day's 
work  draws  to  its  close.  Recent  German  statistics  show  that  the 
highest  rate  of  accidents  is  during  the  fourth  and  fifth  hours  of 
morning  work. 

That  over-fatigue  connected  with  industry  is  responsible  for 
large  numbers  of  nervous  disorders  is,  of  course,  generally  ad- 
mitted. The  growing  prevalence  of  cardiac  neurosis  and  of  neu- 

1  Goldmarck,  p.  37. 


68 


WORK  AND  WEALTH 


rasthenia  in  general  among  working-people  is  attested  by  many 
medical  authorities,  especially  in  occupations  where  long  strains 
of  attention  are  involved.  But  the  general  enfeeblement  and 


Percentage  Killed  and  Injured 
o—  rooJAo»<5»-jOo«oo  r\>c 

ys. 

/ 

/  s 

\ 

\ 

/ 

V 

/ 

j 

\ 

\ 

/ 

r 

V 

/~ 

^ 

J 

\ 

V 

1 

1 

I 

Perct 
in/9 
of  h( 

?/7tagi 
07grc 
•>urs  // 
on  da 
To 
''erma 

»  ofpe* 
uped 
helnjb 
yofac 
ta/Ac 
n  //?5t 

rsons  I 
vccoro 
redpe 
cidertt 
c/deni 
trance 

Vlledi. 
'ing  to 

rsonh 

i 

ls  79,1 
Repor 

ir/njL 
thenu 
adbee 

91 
+s) 

'red 
mber 
naf 

work 
(^ 

«§«  1-2     2-3     3-4    4-5     5-6     6-7    7~8     8-9    9-10    KH! 
%$%                             Numberof  Hours  Worked                          ar?dover 

loss  of  resistance  power  to  disease  germs  of  all  kinds  are  even 
more  injurious  consequences  of  over-exertion.     Many  experi- 
ments attest  the  fact  that  fatigue  reduces  the  power  of  the  blood 
to  resist  bacteria  and  their  toxic  products. 
§  5.  So  far  I  have  dwelt  exclusively  upon  the  physiological 


THE  HUMAN  COSTS  OF  LABOUR 


69 


nature  and  effects  of  fatigue  as  costs  of  labour.  But  due  account 
must  also  be  taken  of  the  psychical  or  conscious  costs.  Much 
work  in  its  initial  stage  contains  elements  of  pleasurable  exercise 
of  some  human  organ  or  faculty,  and  even  when  this  pleasure  has 
worn  off  a  considerable  period  of  indifference  may  ensue.  Though 
1 


den 


Percentage  A 


Percentage  Accidents  by  the 

Hour  of  the  Day 
(German  Insurance  Reports) ' 
J9IO 


6-7    7-8    8-9 


9-/0  1CHI    JI-12    12-1 
Time  of  Day 


1-2     2-3     3-4    4-5      5-6 


boredom  may  set  in  before  any  strain  of  fatigue,  the  earlier  period 
of  ennui  may  not  entail  a  heavy  cost.  But,  when  fatigue  ad- 
vances, the  irksomeness  brings  a  growing  feeling  of  painful  ef- 
fort, and  a  long  bout  of  fatigue  produces  as  its  concomitant  a 
period  of  grave  conscious  irritation  of  nerves  with  a  subsequent 
period  of  painful  collapse.  Where  the  conditions  of  work  are 


70  WORK  AND  WEALTH 

such  as  to  involve  a  daily  repetition  of  this  pain,  its  accumulative 
effect  constitutes  one  of  the  heaviest  of  human  costs,  a  lowering 
of  mentality  and  of  moral  resistance  closely  corresponding  to  the 
decline  of  physical  resistance.  Drink  and  other  sensational  ex- 
cesses are  the  normal  reactions  of  this  lowered  morale.  Thus 
fatigue  ranks  as  a  main  determinant  of  the  'character'  of  the 
working-classes  and  has  a  social  significance  in  its  bearing  upon 
order  and  progress  not  less  important  than  its  influence  upon  the 
individual  organism. 

§  6.  I  have  dwelt  in  some  detail  upon  these  phenomena  of  fa- 
tigue, because  they  exhibit  most  clearly  the  defects  of  the  work- 
ing life  which  carry  heaviest  human  costs.  These  defects  are 
excessive  duration  of  labour,  excessive  specialisation,  excessive 
repetition,  excessive  strain  and  excessive  speed.  Though  sepa- 
rate for  purposes  of  analysis,  these  factors  closely  interact.  Mere 
duration  of  labour  does  not  necessarily  involve  fatigue,  provided 
it  carries  the  elements  of  interest,  variety,  and  achievement.  The 
degree  of  specialisation  or  subdivision  of  labour  counts  on  the 
whole  more  heavily.  But  even  a  high  degree  of  specialisation  is 
alleviated,  where  it  contains  many  little  changes  of  action  or  posi- 
tion, and  affords  scope  for  the  satisfaction  attending  expert  skill. 
It  is  the  constant  repetition  of  an  identical  action  at  a  prescribed 
pace  that  brings  the  heaviest  burden  of  monotony. 

It  is  upon  this  combination  of  conditions  that  the  first  count 
against  the  dominion  of  machinery  is  based.  The  brief  physiolog- 
ical consideration  we  have  brought  to  bear  upon  the  problem  of 
fatigue  gives  clearer  significance  to  monotony  as  a  'cost'.  It  im- 
plies, not  merely  a  dull  and  distasteful  occupation,  but  one  which, 
taxing  continually  the  same  muscles  and  the  same  nerve-centres, 
increases  the  poison  of  fatigue.  Hand  labour  of  a  narrow  order, 
or  machine-tending  however  light,  entails  this  heavy  cost,  if 
maintained  over  a  long  period  of  time. 

But  where  monotonous  repetition  is  closely  directed  by  the 
action  of  a  machine,  as  regards  its  manner  and  its  pace,  there  is 
a  special  nervous  cost.  For  a  hand-worker,  however  dull  or 
heavy  is  the  work,  retains  some  slight  power  of  varying  the  pace 
and  perhaps  of  changing  his  position  or  mode  of  work.  A  worker 
who  either  feeds  a  machine  or  adjusts  his  movements  in  obedience 


THE  HUMAN  COSTS  OF  LABOUR  71 

to  those  of  a  machine,  as  for  instance  a  cutter  in  the  clothing 
trade  or  in  shoemaking,  has  no  such  liberty.  The  special  cost 
here  entailed  is  that  of  trying  to  make  an  organism  conform  in  its 
movements  to  a  mechanism.  Now  a  human  being,  or  any  other 
organism,  has  certain  natural  rhythms  of  movement  for  work, 
related  to  the  rhythms  of  heart  and  lungs  and  other  organic  pro- 
cesses, and  there  are  natural  limits  also  to  the  pace  at  which  he 
can  efficiently,  or  even  possibly,  continue  working.  A  machine 
also  has  rhythms  and  a  maximum  efficiency  pace.  But  the 
rhythms  of  a  machine  are  determined  by  its  mechanical  con- 
struction and  the  apparatus  which  furnishes  its  power:  they  are 
continuously  uniform,  and  are  capable  of  being  speeded  up  be- 
yond the  capacity  of  the  human  tender. 

A  human  rhythm  is  really  labour-saving,  in  as  much  as  it  eases 
the  strain  to  work  in  accordance  with  a  natural  swing.  To  set 
a  man  to  follow  the  rhythm  of  a  machine  not  only  loses  this  econ- 
omy, but  entails  an  extra  effort  of  conformity.  The  tendency  to 
speed  up  a  machine,  so  as  to  get  the  most  out  of  it,  is  liable  to 
take  out  of  the  machine-tender  even  more  than  he  is  capable  of 
recognising  in  the  way  of  nervous  strain.  Where  considerable 
muscular  activity  is  also  required  in  following  a  high  pace  set 
by  a  machine,  an  appalling  burden  of  human  costs  may  be  ac- 
cumulated in  a  factory  day. 

When  to  such  direct  human  costs  of  labour  are  added  the  risks 
of  industrial  accident  or  of  industrial  diseases,  the  physical  in- 
juries involved  in  bad  atmosphere,  heat,  noise  and  other  inci- 
dental pains  and  inconveniences  which  beset  many  branches  of 
industry,  we  begin  to  realise  with  more  distinctness  the  meaning 
of  '  costs  of  labour '  in  the  human  as  distinguished  from  the  eco- 
nomic sense. 

Later  on  we  shall  turn  to  consider  how  far  the  economic  or 
monetary  'costs'  correspond  with  these  human  costs. 

Our  present  task,  however,  is  to  conduct  a  brief  survey  of  gen- 
eral industry  in  order  to  form  some  idea  of  the  magnitude  of  these 
human  costs  in  the  leading  branches  of  production,  and  to  con- 
sider how  far  they  are  offset  or  qualified  by  factors  of  human  in- 
terest or  utility,  such  as  we  found  widely  prevalent  in  the  work 
of  the  artistic,  official,  and  administrative  classes. 


CHAPTER  VI 

THE  REIGN   OF  THE  MACHINE 

§  i.  If  it  were  true  that  all  the  labour  of  the  wage-earning 
classes  which  went  to  produce  the  real  national  income  were, 
or  tended  to  become,  monotonous  and  highly  specialised  machine 
tending,  the  workers  constantly  engaged  in  close  repetition  of 
some  single  narrow  automatic  process,  contributing  to  some 
final  composite  product  whose  form  and  utility  had  no  real  mean- 
ing for  them,  the  tale  of  human  costs  would  be  appalling. 

Fortunately  this  is  not  the  whole  truth  about  labour.  Even 
the  charge  against  machinery  of  mechanising  the  worker  is  fre- 
quently overstated.  The  only  productive  work  that  is  entirely 
automatic  is  done  by  machines.  For  the  main  trend  of  the  de- 
velopment of  industrial  machinery  has  been  to  set  non-human 
tools  and  power  to  undertake  work  which  man  could  not  execute 
with  the  required  regularity,  exactitude,  or  pace,  by  reason  of 
certain  organic  deficiencies.  While,  then,  the  sub-divided  labour 
in  most  staple  industries  is  mostly  of  a  narrowly  prescribed  and 
routine  character,  it  is  hardly  ever  so  completely  uniform  and 
repetitive  as  that  done  by  a  machine.  Purely  routine  work,  de- 
manding no  human  skill  or  judgment  is  nearly  always  under- 
taken by  machinery,  except  where  human  labour  can  be  bought 
so  cheap  that  it  does  not  pay  to  invent  and  apply  machinery  so 
as  to  secure  some  slightly  increased  regularity  or  pace  of  output. 
Where,  then,  as  in  most  modern  factories,  human  labour  coop- 
erates with,  tends  and  feeds  machinery,  this  human  labour  is  of 
a  less  purely  repetitive  character  than  the  work  done  by  the 
machines.  Some  portions  of  the  labour,  at  any  rate,  contain  ele- 
ments of  skill  or  judgment,  and  are  not  entirely  uniform. 

We  can  in  fact  distinguish  many  kinds  and  grades  of  human 
cooperation  with  machinery.  In  some  of  them  man  is  the  ha- 
bitual servant,  in  others  the  habitual  master  of  the  machine;  in 
others,  again,  the  relation  is  more  indirect  or  incidental.  Though 

72 


THE  REIGN  OF  THE  MACHINE  73 

an  increasing  number  of  the  processes  in  the  making  and  moving 
of  most  forms  of  material  goods  involves  the  use  of  machinery 
and  power,  they  do  not  involve,  as  is  sometimes  supposed,  the 
employment  of  a  growing  proportion  of  the  workers  in  the  merely 
routine  labour  of  tending  the  machines.  Such  a  supposition, 
indeed,  is  inconsistent  with  the  primary  economy  of  machinery, 
the  so-called  labour-saving  property.  It  might,  indeed,  be  the 
case  that  the  machine  economy  was  accompanied  by  so  vast  an 
increase  of  demand  for  machine-made  goods,  that  the  quantity 
of  labour  required  for  tending  the  machines  was  greater  than 
that  formerly  required  for  making  by  hand  the  smaller  quantity. 
In  some  trades  this  is  no  doubt  so,  as  for  instance  in  the  print- 
ing trade,  and  in  some  branches  of  textile  industry  where  the 
home  market  is  largely  supplemented  by  export  trade.  But  the 
displacement  of  machine-tenders  by  automatic  machines  is  ad- 
vancing in  many  of  the  highly-developed  machine  industries. 
The  modern  flour  or  paper  mill,  for  instance,  performs  nearly  all 
its  feeding  processes  by  mechanical  means  while  in  the  textile 
trade  automatic  spindles  and  looms  have  reduced  the  number  and 
changed  the  character  of  the  work  of  minders.  More  and  more 
of  this  work  means  bringing  human  elements  of  skill  and  judg- 
ment and  responsibility  to  bear  in  adjusting  or  correcting  the 
irregularities  or  errors  in  the  operations  of  machinery.  Machines 
are  liable  to  run  down,  become  clogged,  break,  or  otherwise  'go 
wrong'.  These  errors  they  can  often  be  made  to  announce  by 
automatic  signals,  but  human  care  is  needed  for  their  correction. 
This  work,  however  monotonous  and  fatiguing  to  muscles  or 
nerves,  is  not  and  cannot  be  entirely  repetitive. 

In  many  other  processes  where  the  machine  is  said  to  do  the 
work,  human  skill  and  practice  are  required  to  set  and  to  regulate 
the  operations  of  the  machine.  The  use  of  automatic  lathes  is  an 
instance  of  cooperation  in  which  some  scope  for  human  judgment 
remains.  The  metal  and  engineering  trades  are  full  of  such  in- 
stances. Though  machinery  is  an  exceedingly  important  and  in 
many  processes  a  governing  factor,  it  cannot  be  said  to  reduce 
the  labour  that  works  with  it  to  its  own  automatic  level.  On  the 
contrary,  it  may  be  taken  as  generally  true  that,  in  the  processes 
where  machinery  has  reached  its  most  complex  development,  an 


74  WORK  AND  WEALTH 

increased  share  of  the  labour  employed  in  close  connection  with 
the  machinery  is  that  of  the  skilled  engineer  or  fitter  rather  than 
of  the  mere  tender.  The  heaviest  and  the  most  costly  labour  in 
these  trades  is  usually  found  in  the  processes  where  it  has  not 
been  found  practicable  or  economical  to  apply  machinery.  In- 
deed, the  general  tendency,  especially  noticed  in  America,  in  the 
metal  trades,  has  been  to  substitute  for  a  large  employment  of 
skilled  hand  labour  of  a  narrowly  specialised  order,  a  small  em- 
ployment of  more  skilled  and  responsible  supervisors  of  machin- 
ery and  a  large  employment  of  low-skilled  manual  labour  in  the 
less  mechanical  departments,  such  as  furnace  work  and  other 
operations  preparatory  to  the  machine  processes. 

§  2.  Though  accurate  statistics  are  not  available,  it  appears 
that  in  this  country  the  proportion  of  the  working  population 
employed  in  manufactures  is  not  increasing,  and  it  is  more  than 
probable  that  an  exact  analysis  of  the  nature  of  the  work  of 
our  factories  and  workshops  would  show  that  the  proportion 
engaged  in  direct  attendance  on  machinery  was  steadily  fall- 
ing. 

For  even  in  manufacture,  the  department  of  industry  where 
machine  processes  have  made  most  advance,  there  are  many 
processes  where  hand  labour  is  still  required,  in  sorting  and  pre- 
paring materials  for  machinery,  in  performing  minor  processes 
of  trimming  or  decoration,  in  putting  together  parts  or  in  pack- 
ing, etc.  Where  female  labour  is  employed,  a  very  large  propor- 
tion of  it  will  be  found  to  be  engaged  in  such  processes  outside 
the  direct  dominion  of  machinery.  Though  most  of  the  distinc- 
tively human  'costs'  of  machine  processes,  the  long  hours,  high 
pace,  monotony  of  muscles  and  nerve  strain,  are  usually  present 
in  such  work,  it  is  not  absolutely  mechanical,  some  slight  ele- 
ments of  skill  and  volitional  direction  being  present. 

There  are  other  restrictions  upon  the  purely  repetitive  or 
routine  character  of  manufacture.  There  is  much  work  which 
no  machine  can  be  invented  to  do  because  of  certain  inherent 
elements  of  irregularity.  Most  of  these  are  related  to  the  organic 
nature  of  some  of  the  materials  used.  Where  expensive  animal 
or  vegetable  products  require  treatment,  their  natural  inequali- 
ties often  render  a  purely  mechanical  operation  impossible  or 


THE  REIGN  OF  THE  MACHINE  75 

wasteful.  The  killing,  cutting,  and  canning  processes  in  the  meat 
trade,  the  picking,  preparation  and  packing  of  fruit,  many  pro- 
cesses in  the  tanning  and  leather  trade,  the  finer  sorts  of  cabinet- 
making,  are  examples  of  this  unadaptability  of  organic  materials 
to  purely  mechanical  treatment.  Where  very  valuable  inor- 
ganic materials  are  used  in  making  high-grade  products,  similar 
limitations  in  the  machine  economy  exist.  The  finest  jewellery 
and  watch-making  still  require  the  skill  and  judgment  of  the 
practised  human  hand  and  eye.  Some  of  the  irregularities  in 
such  processes  are,  indeed,  so  small  and  so  uninteresting  as  to 
afford  little,  if  any,  abatement  of  human  costs;  but  they  remove 
the  labour  from  the  direct  control  of  a  machine. 

A  more  important  irregularity  which  restricts  machinery  in 
manufacture  exists  where  the  personal  needs  or  taste  of  the  con- 
sumer help  to  determine  the  nature  of  the  process  and  the  prod- 
uct. Here  again  we  are  confronted  by  the  antagonism  of  mech- 
anism and  organism.  For  the  true  demand  of  consumers  is  the 
highest  expression  of  the  uniqueness  which  distinguishes  the  or- 
ganic. As  no  two  consumers  are  exactly  identical  in  size,  shape, 
physical  or  mental  capacities,  tastes  and  needs,  the  goods  re- 
quired for  their  consumption  should  exhibit  similar  differences. 
Machine  economy  cannot  properly  meet  this  requirement.  It 
can  only  deal  with  consumers  so  far  as  their  human  nature  is  com- 
mon: it  cannot  supply  the  needs  of  their  individuality.  So  far 
as  they  are  willing  to  sink  their  differences,  consenting  to  con- 
sume large  quantities  of  goods  of  identical  shapes,  sizes  and  qual- 
ities, the  machine  can  supply  them.  But  since  no  two  consumers 
are  really  identical  in  needs  and  tastes,  or  remain  quite  constant 
in  their  needs  and  tastes,  the  fundamental  assumption  of  routine- 
economy  is  opposed  to  the  human  facts. 

Consumers  who  refuse  to  sink  their  individuality  and  are 
'particular'  in  the  sort  of  clothes  they  wear,  the  sort  of  houses 
and  furniture  and  other  goods  they  will  consent  to  buy,  exercise 
a  power  antagonistic  to  routine  labour.  They  demand  that  pro- 
ducers shall  put  out  the  technical  skill,  the  care,  taste  and  judg- 
ment required  to  satisfy  their  feelings  as  consumers.  That  is  to 
say,  they  demand  the  labour  not  of  the  routine-worker  but  of  the 
craftsman,  work  which,  though  not  creative  in  the  full  free  ar- 


76  WORK  AND  WEALTH 

tistic  sense,  contains  distinct  elements  of  human  interest  and  ini- 
tiative. 

§  3.  The  presence  and  the  possibilities  of  this  individuality 
of  labour,  flowing  from  the  educated  individuality  of  consumers, 
are  a  most  important  influence  in  the  lightening  of  the  human 
costs  of  labour.  At  present  no  doubt  a  very  small  proportion  of 
the  material  goods  turned  out  by  the  industrial  system  contains 
any  appreciable  element  of  this  individuality  of  workmanship. 
It  may,  indeed,  well  appear  that  our  recent  course  during  the 
development  of  the  machine  economy  has  been  a  retrograde  one. 
In  the  beginnings  of  industry  it  appeared  as  if  there  were  more 
scope  for  the  producer's  self-expression,  more  joy  of  work,  more 
interest  in  the  product,  even  though  destined  for  the  commonest 
uses.  The  guilds  in  the  Middle  Ages  preserved  not  a  little  of  this 
happier  spirit  of  craftsmanship.  To  those  who  brood  upon  these 
visions  of  the  past,  our  modern  industrial  development  has  often 
seemed  a  crude  substitution  of  quantity  of  goods  for  quality, 
the  character  of  labour  deteriorating  in  the  process.  With  the  ele- 
ment of  truth  in  such  a  judgment  is  mingled  much  falsehood. 
There  has  never  been  an  age  or  a  country  where  the  great  bulk 
of  labour  was  not  toilsome,  painful,  monotonous,  and  uninter- 
esting, often  degrading  in  its  conditions.  Bad  as  things  are, 
when  regarded  from  the  standpoint  of  a  human  ideal,  they  are 
better  for  the  majority  of  the  workers  in  this  and  in  other  ad- 
vanced industrial  countries  than  ever  in  the  past,  so  far  as  we 
can  reconstruct  and  understand  that  past.  Machinery  has  ren- 
dered a  great  human  service  by  taking  over  large  masses  of 
heavy,  dull,  and  degrading  work.  When  fully  developed  and 
harnessed  to  the  social  service  of  man,  it  should  prove  to  be  the 
great  liberator  of  his  free  productive  tastes  and  faculties,  per- 
forming for  him  the  routine  processes  of  industry  so  that  he  may 
have  time  and  energy  to  devote  himself  to  activities  more  inter- 
esting and  varied. 

The  uniqueness  of  the  individual  consumer  has  only  begun  to 
make  its  impression  upon  industry.  For  it  needs  liberty  and 
education  for  a  man  to  recognise  this  property  of  organic  unique- 
ness and  to  insist  on  realising  it.  The  first  movements  of  con- 
scious tastes  in  a  nation  or  a  class  are  largely  imitative,  taking 


THE  REIGN  OF  THE  MACHINE  77 

shape  in  fashions  sufficiently  wide-spread  and  uniform  to  lend 
themselves  to  routine  mechanical  production.  The  self-assertion 
of  the  individual  is  a  slower  fruit  of  culture.  But,  as  it  grows, 
it  will  offer  a  continually  stronger  opposition  to  the  dominion 
of  mechanical  production.  It  will  do  this  in  two  ways.  In  the 
first  place,  it  will  cause  a  larger  proportion  of  demand  to  be  di- 
rected to  the  classes  of  products,  such  as  intellectual,  aesthetic, 
and  personal  services,  which  are  by  their  nature  less  susceptible 
of  mechanical  production.  In  the  second  place,  weakening  the 
traditional  and  the  imitative  factors  in  taste  and  demand,  it 
will  cause  consumption,  even  of  the  higher  forms  of  material  com- 
modities, to  be  a  more  accurate  expression  of  the  changing  needs 
and  tastes  of  the  individual,  stamping  upon  the  processes  of  pro- 
duction the  same  impress  of  individuality. 

But  though  the  direct  control  of  machinery  over  human  labour 
is  obstructed  in  the  earlier  extractive  processes  by  the  refractory 
uneven  nature  of  materials,  and  in  the  final  processes  by  the 
nature  and  particular  requirements  of  consumers,  its  influence 
extends  far  beyond  the  middle  processes  of  manufacture  where  its 
prominence  is  greatest.  Power-driven  machinery  plays  a  larger 
part  in  agriculture  every  year:  mining  is  the  first  of  machine  in- 
dustries in  the  sense  that  it  employs  the  largest  amount  of  horse- 
power per  man;  the  transport  trade  by  sea  and  land  is  mechan- 
ised even  in  its  minor  local  branches;  the  great  public  services, 
supplying  light,  water,  and  other  common  wants,  are  among  the 
largest  users  of  power-driven  machinery;  the  greatest  of  our  ma- 
terial industries  which  still  depends  mainly  upon  hand  labour, 
the  building  and  road-making  group,  is  constantly  increasing  its 
dependence  on  machinery  for  its  heavier  carrying  work  and  for 
the  preparation  of  the  metal,  stone  and  woodwork  it  employs. 
When  we  add  the  growth  of  new  large  manufactures,  such  as 
chemicals  and  electrical  apparatus,  the  enormous  expansion  of 
the  paper  and  printing  trades  under  the  new  mechanical  con- 
ditions, the  recent  transference  of  the  processes  of  the  prepara- 
tion of  foods  and  drinks  and  laundry  work  from  the  private 
house  to  the  factory,  we  shall  recognise  that  the  net  influence 
of  machinery,  as  determining  the  character  of  human  labour,  is 
still  advancing  with  considerable  rapidity. 


78  WORK  AND  WEALTH 

§  4.  It  is  not  easy  to  answer  the  two  related  questions,  'How 
far  is  machinery  the  master,  how  far  the  servant,  of  the  workers 
who  cooperate  with  it?'  'How  far  does  machinery  aggravate, 
how  far  lighten  the  human  costs  of  labour? '  Even  when  we  com- 
pare the  work  of  the  classes  most  subservient  to  machinery, 
the  feeders  and  tenders  in  our  factories,  with  the  domestic  or 
earlier  factory  processes  under  hand  labour,  it  is  by  no  means 
self-evident  that  the  net  burden  of  the  human  costs  has  been  en- 
hanced. For,  though  the  spinning  and  weaving  work  before  the 
industrial  revolution  had  certain  slight  elements  of  freedom  and 
variety  now  absent,  many  of  the  hygienic  conditions  were  far 
worse,  the  hours  of  labour  were  usually  longer,  and  the  large  em- 
ployment of  old  folk  and  tender  children,  in  work  nearly  as  un- 
varied as  that  enjoined  by  modern  machinery,  enslaved  the  en- 
tire life  of  the  home  and  family  to  the  narrow  and  precarious 
conditions  of  a  small  local  trade.  The  real  liberty  of  the  worker, 
as  regards  his  work,  or  its  disposal  in  the  market,  was  hardly 
greater  than  in  the  modern  factory. 

In  most  of  the  great  branches  of  production,  machinery  is 
rather  an  adjunct  to  labour  than  a  director.  The  labourer  in 
charge  of  the  machine  tends  more  to  the  type  of  the  engineer 
than  to  that  of  the  feeder  or  mere  minder.  Though  the  mining, 
metal,  chemical,  paper,  food  and  drink  manufactures  contain 
large  quantities  of  machinery,  a  large  proportion  of  those  who 
have  to  deal  with  the  machines  are  skilled  manual  labourers. 
So  in  the  transport  trade,  though  the  displacement  of  the  old-time 
sailor  by  the  engineer  and  stoker,  of  the  horse-driver  by  the  en- 
gine-driver and  the  motor-man,  sometimes  appears  to  involve  a 
degradation  of  labour,  the  issue  is  a  doubtful  one,  if  all  the  pros 
and  cons  are  taken  into  due  account.  As  regards  the  employ- 
ment of  machinery  in  the  building  and  contracting  trades,  as  in 
the  mining,  its  first  and  obvious  effect  has  been  to  relieve  human 
labour  from  much  of  the  heaviest  muscular  toil.  Though  most  of 
such  labour  involves  too  slight  elements  of  interest  or  skill  greatly 
to  alleviate  the  physical  fatigue,  it  cannot  be  said  that  machinery 
has  increased  the  burden. 


CHAPTER  VH 

THE  DISTRIBUTION  OF  HUMAN  COSTS 

§  i.  In  endeavouring  to  estimate  the  human  costs  of  labour 
in  terms  of  physical  wear  and  tear  and  the  conscious  pains  and 
penalties  entailed  by  the  conditions  under  which  many  indus- 
trial processes  are  carried  on,  we  have  hitherto  considered  these 
costs  as  borne  by  workers,  irrespective  of  age,  sex,  or  other  dis- 
criminations. But  it  is  self-evident  that  a  given  strain  upon 
muscles  or  nerves  over  a  period  of  time  will  vary  greatly,  both 
in  the  organic  cost  and  in  the  conscious  pain  which  it  entails, 
according  to  the  strength  and  endurance,  nervous  structure, 
physical  and  moral  sensitiveness,  of  the  different  sorts  of  work- 
ers. Indeed,  a  given  output  of  productive  energy  will  evidently 
entail  a  different  human  cost  in  every  person  called  upon  to 
give  it  out:  for  every  difference  of  strength,  skill,  capacity  and 
character  must  to  some  extent  affect  the  organic  burden  of  the 
task. 

In  endeavouring,  therefore,  to  relate  the  human  to  the  eco- 
nomic costs  of  production  of  any  quantity  of  material  wealth  or 
services,  it  would  be  necessary  to  consider  how  far  the  conditions 
of  employment  tend  to  economise  human  costs  by  distributing 
the  burden  proportionately  to  the  power  to  bear  it.  The  human 
wastes  or  excessive  costs,  entailed  by  conditions  of  employment 
which  impose  unequal  burdens  upon  workers  with  equal  capacity 
to  bear  them,  or  which  distribute  the  burden  unequally  in  tune 
over  the  same  set  of  workers,  alternating  slack  periods  with 
periods  of  excessive  over-time,  are  obvious.  Unfortunately  the 
operation  of  our  industrial  system  has  not  hitherto  taken  these 
into  sufficient  account.  Though  the  physical,  moral  and  social 
injuries,  due  to  alternating  periods  of  over  and  under  work,  are 
generally  admitted,  the  full  costs  of  such  irregularity,  human  and 
even  economic,  are  far  from  being  adequately  realised.  While 
some  attempts  at  '  decasualisation '  are  being  made,  the  larger 

79 


8o  WORK  AND  WEALTH 

and  more  wasteful  irregularities  of  seasonal  and  cyclical  fluctua- 
tions are  still  regarded  as  irremediable.  By  the  workers  them- 
selves and  even  by  social  reformers,  the  injury  inflicted  upon 
wages  and  the  standard  of  living  by  irregularity  of  employment 
is  appreciated  far  more  adequately  than  the  related  injury  in- 
flicted on  the  physique  and  morale  of  the  worker  by  sandwiching 
periods  of  over-exertion  between  intervals  of  idleness. 

This  brief  survey,  however,  is  no  place  for  a  discussion  of  the 
causes  and  remedies  of  irregular  employment.  It  must  suffice 
to  note  that  over  a  large  number  of  the  fields  of  industry  the  ex- 
cesses and  defects  of  such  irregularity  prevail  to  an  extent  which 
adds  greatly  to  the  total  human  cost  of  the  products.  So  far  as 
our  nation  is  concerned,  there  is  no  reason  to  hold  that  this  waste 
is  increasing.  Evidence  of  hours  of  labour  and  of  unemployment, 
indeed,  appear  to  indicate  that  it  is  somewhat  diminishing.  But 
the  unequal  time-distribution  of  human  costs  must  continue  to 
rank  as  a  great  enhancement  of  the  aggregate  of  such  costs. 

§  2.  But  not  less  injurious  than  the  unequal  treatment  of 
equals,  is  the  equal  treatment  of  unequals.  The  bad  human  econ- 
omy of  working  immature  children  is  a  lesson  which  even  the  most 
'  civilised '  nations  have  been  exceedingly  slow  to  learn.  The  bad 
human  economy  of  working  old  persons  of  declining  vigour,  when 
able-bodied  adult  labour  is  available,  is  so  far  from  being  gener- 
ally recognised  that  employers  are  actually  commended  on  the 
ground  of  humanity  for  keeping  at  labour  their  aged  employees, 
when  younger  and  stronger  workers  are  available.  Fortunately, 
the  larger  provision  for  retiring  pensions  attests  the  growing 
recognition  of  this  aggravation  of  the  human  costs  of  industry. 
In  both  cases  alike,  the  employment  of  the  young  and  of  the  old, 
the  error  arises  from  a  short-sighted  view  of  the  interests  of  the 
single  person  or  his  single  family,  instead  of  a  far-sighted  view 
of  the  welfare  of  the  community.  It  is  often  a  source  of  imme- 
diate gain  to  a  working-class  family  to  put  the  children  out  to 
wage-earning  as  early  as  possible,  and  to  keep  old  people  working 
as  long  as  they  can  get  work  to  do.  It  does  not  pay  the  nation, 
even  in  the  economic  sense,  that  either  of  these  things  should  be 
done.  The  case  of  child-labour  is,  of  course,  the  more  serious, 
in  that  it  evidently  entails  not  merely  a  wasteful  strain  upon 


THE  DISTRIBUTION  OF  HUMAN  COSTS  81 

feeble  organisms,  but  an  even  heavier  future  cost  in  stunted 
growth  and  impaired  efficiency  throughout  an  entire  life. 

When  the  play  of  current  economic  forces  places  upon  women 
work  which  men  could  perform  more  easily,  or  creates  women's 
industries  with  conditions  of  labour  involving  excessive  strains 
upon  the  organism,  the  double  human  costs  are  even  heavier. 
For  if  excessive  fatigue  or  nervous  strain  affects  a  woman  as 
worker,  the  injurious  costs  are  likely  to  be  continued  and  en- 
hanced through  her  capacity  for  motherhood.  To  use  up  or 
damage  its  women  by  setting  them  to  hard  wage  labour  in  mill 
and  workshop  is  probably  the  greatest  human  waste  a  nation 
could  practise  or  permit.  For  some  of  the  prevailing  tendencies 
of  modern  industrialism  appear  to  be  more  'costly'  in  their  bear- 
ing upon  women  than  on  men.  In  regard  to  factory  work,  and 
all  other  industrial  work  involving  a  long  continuous  muscular 
or  nervous  strain,  or,  as  in  shop  labour  with  its  long  hours  of 
standing,  medical  authorities  are  unanimous  in  holding  that  wo- 
men suffer  more  than  men.1  'If  a  like  amount  of  physical  toil 
and  effort  be  imposed  on  women,  they  suffer  to  a  larger  degree/ 
states  Sir  W.  MacCormac.2  Statistics  of  employment  from  va- 
rious countries  agree  in  showing  that  the  amount  of  morbidity, 
as  measured  by  the  number  of  days  lost  by  illness,  is  greater 
among  working-women  than  among  working-men,  and  that  the 
mortality  of  working-women  is  greater  than  that  of  working- 
men,  notwithstanding  the  fact  that  the  average  life  of  a  female 
is  longer  than  that  of  a  male.  Long  hours  and  speeding-up  of 
machinery  thus  evidently  inflict  graver  organic  costs  on  women 
than  on  men.  Where  piecework  is  in  vogue,  it  furnishes  a  stronger 
stimulus  to  over-strain  in  women,  because  the  general  lowness  of 
their  wage  gives  a  larger  importance  to  each  addition. 

§  3.  Thus  in  comparing  the  human  costs  of  producing  a  given 
quantity  of  goods,  due  account  must  be  taken  of  the  distribution 
of  the  output  of  productive  energy  among  workers  of  different 
sexes,  and  ages.  The  earlier  tendency  of  the  factory  system 
in  this  country,  the  existing  tendency  in  some  countries,  has  been 

1  Cf.  Goldmarck,  Part  II,  pp.  -126. 

2  Report  of  the  Select  Committee  of  the  House  of  Lords  on  Early  Closing  in  Shops, 
1901. 


82  WORK  AND  WEALTH 

to  impose  a  growing  of  monotonous  and  fatiguing  labour  upon 
women  and  children.  At  certain  stages  in  the  development  of 
industrial  machinery,  this  has  been  held  to  be  a  'profitable'  econ- 
omy, and  in  many  processes  of  hand  labour  subsidiary  to  the 
factory  system  it  still  survives.  Though  legislation  and  other  in- 
fluences have  done  much  to  check  the  worst  injuries  of  child  em- 
ployment in  factories  and  workshops  in  more  civilised  communi- 
ties, a  great  amount  of  human  cost  is  still  incurred  under  this 
head.  Child  half-timers  are  still  used  in  considerable  numbers 
in  textile  factories,  while  the  vast  expansion  of  distributive  work 
has  sucked  into  premature  wage-earning  immense  numbers  of 
boys  who  ought  to  be  at  school.  It  is  probable  that  the  net  ten- 
dency of  British  industry  in  recent  years  has  been  towards  a 
slow  reduction  of  the  more  injurious  and  'costly'  forms  of  female 
employment.  Though  an  enormous  number  of  females  are  en- 
gaged in  work  the  hours  and  hygienic  conditions  of  which  escape 
legal  regulation,  probably  a  growing  proportion  of  employed 
women  come  under  an  economy  of  shorter  hours.  The  drudg- 
ery of  domestic  service  engages  a  less  number  of  women,  while 
the  opening  of  a  larger  variety  of  employments  both  in  manu- 
facture and  in  commerce  has  somewhat  improved  their  power 
to  resist  the  excessive  pressure  of  machine-conditions.  The  re- 
cent organised  attack  upon  the  'sweated  industries',  however, 
reveals  the  fact  that  at  the  lower  level  of  many  trades  a  great 
mass  of  oppressive  and  injurious  labour  is  extorted  from  working- 
women.  Certain  forms  of  new  mechanical  labour,  not  involving 
heavy  muscular  fatigue,  but  taxing  severely  the  nervous  system, 
are  occupying  a  large  number  of  women.  The  type-writer  and 
the  telephone  have  not  yet  been  brought  into  conformity  with 
the  demands  of  health.  Though  machinery  is  generally  bringing 
in  its  wake  restrictions  on  hours  of  labour,  the  normal  work-day 
of  factory,  office  and  shop  still  imposes  a  gravely  excessive  strain 
upon  women  employees.  No  small  proportion  of  this  excessive 
cost  of  women's  work,  however,  is  attributable  to  legal,  profes- 
sional, or  conventional  restrictions,  which,  precluding  women 
from  entering  many  skilled  and  lucrative  employments,  compel 
them  to  compete  in  low-skilled  and  overstocked  labour-markets. 
The  social  waste  of  such  sex  discrimination  is  two-fold.  Even  in 


THE  DISTRIBUTION  OF  HUMAN  COSTS  83 

trades  and  professions  for  which  men  have  usually  a  greater  apti- 
tude than  women,  some  women  can  perform  the  work  better  and 
more  easily  than  some  men,  and,  if  they  are  denied  equal  opportu- 
nity of  access,  the  work  is  done  worse  or  at  a  greater  human  cost. 
The  refusal  to  admit  women  into  the  learned  professions  upon 
equal  terms  with  men  undoubtedly  involves  a  loss  to  society  of 
some  of  the  finest  service  of  the  human  intellect,  while  it  en- 
trusts some  of  the  skilled  and  responsible  work,  thus  denied  to 
women,  to  relatively  ignorant  and  incompetent  men.  The  other 
human  cost  is  perhaps  even  heavier.  For  the  excessive  competi- 
tion, to  which  women  are  thus  exposed  in  the  occupations  left 
to  them,  depresses  the  remuneration  in  most  instances  below 
the  true  level  of  physical  efficiency,  induces  or  compels  excessive 
hours  of  labour,  breaks  down  the  health  of  women-workers  and 
injures  their  life. 

§  4.  This  general  survey  shows  that  the  human  'costs'  of  la- 
bour are  closely  associated  in  most  cases  with  that  subdivision 
and  specialisation  of  activities  which  takes  its  extreme  form  in 
machine  tending  and  which  conforms  most  closely  to  mere  'repe- 
tition' as  distinguished  from  the  creative  branches  of  produc- 
tion. But  this  identification  of  'repetition'  and  human  costs 
cannot  be  pressed  into  a  general  law.  For  reflection  shows  that 
repetition  or  routine  does  not  always  carry  cost,  and  that  on  the 
other  hand  some  labour  which  has  considerable  variety  is  very 
costly.  Healthy  organic  life  permits,  indeed  requires,  a  certain 
admixture  of  routine  or  repetition  with  its  more  creative  func- 
tions. A  certain  amount  of  regular  rhythmic  exercise  of  the 
same  muscles  and  nerve-centres  yields  vital  utility  and  satisfac- 
tion. In  some  sports  this  exercise  may  be  carried  so  far  as  to 
involve  considerable  elements  of  fatigue  and  endurance  which 
are  offset  during  their  occurrence  by  the  sense  of  personal  prow- 
ess and  the  interest  of  achievement,  This  sentimental  zest  of 
endurance  may  notoriously  be  carried  to  extremes,  injurious  to 
the  physical  organism.  Moreover,  a  certain  amount  of  narrow 
physical  routine  often  furnishes  a  relief  element  for  the  tired 
nerves  or  brain.  Digging  or  knitting,  though  intolerable  as  a 
constant  employment,  may  furnish  by  their  very  physical  rou- 
tine an  organic  benefit  when  applied  as  a  recreation.  The  same, 


84  WORK  AND  WEALTH 

indeed,  is  true  of  most  other  not  too  taxing  forms  of  manual  or 
mental  routine  labour,  especially  if  they  contain  some  obvious 
utility.  Some  slight  element  of  skill  seems  needed  for  certain 
natures,  but  a  bare  uninteresting  repetition  commonly  suffices. 

Such  considerations  dispose  of  the  assumption  that  all  repeti- 
tion or  routine  in  productive  work  is  necessarily  indicative  of 
human  cost  and  carries  no  organic  utility  or  satisfaction.  It  is 
only  when  repetition  is  extended  so  as  to  engage  too  large  a  share 
of  the  time  and  energy  of  a  human  being  that  it  involves  a  cost. 

So,  on  the  other  hand,  it  is  not  the  case  that  all  labour  con- 
taining variety  and  opportunity  for  skill  is  costless  and  organ- 
ically good.  Take  for  a  notable  example  agricultural  labour. 
Irregularity  of  soil  and  weather,  the  changes  and  chances  of 
animal  and  vegetable  life,  the  performance  of  many  different 
processes,  remove  such  work  from  the  category  of  exact  routine. 
Yet  most  of  the  labour  connected  with  agriculture  is,  under  the 
actual  conditions  of  its  performance,  heavy,  dull  and  joyless.  In 
each  process  there  is  usually  enough  repetition  and  monotony 
to  inflict  fatigue,  and  the  accumulation  of  separate  fatigues  in  a 
long  day's  work,  unalleviated  by  adequate  personal  interest  in 
the  process  or  its  product,  makes  a  heavy  burden  of  cost. 

The  same  holds  of  other  departments  of  industry  where  some 
inherent  elements  of  skill  and  interest  are  found.  The  total  bur- 
den of  effort  given  out  in  a  long  day's  work,  continued  week  after 
week,  year  after  year,  under  the  conditions  of  wagedom,  greatly 
outweighs  these  technical  advantages.  Duration  and  compul- 
sion cancel  most,  though  not  all,  of  the  superiority  of  such  work 
over  machine  tending,  or  clerking.  A  little  labour  in  any  of  the 
handicrafts,  in  machine-running,  the  management  of  motor-cars 
or  boats,  in  gardening  and  other  modes  of  agriculture,  serves  as 
a  pleasant  pastime  when  undertaken  as  a  voluntary  and  occa- 
sional employment.  Make  it  regular,  continuous,  compulsory, 
and  the  enjoyment  soon  vanishes.  The  very  elements  of  inter- 
est for  the  casual  amateur  often  constitute  the  heaviest  cost  for 
the  worker  who  lives  by  doing  this  and  nothing  else.  Take  motor- 
driving  for  an  example.  The  quick  exercise  of  nerve  and  muscle, 
the  keenness  of  eye,  wrist  and  attention,  required  to  drive  easily, 
quickly  and  safely,  amid  traffic  or  in  a  tangle  of  roads,  gives 


THE  DISTRIBUTION  OF  HUMAN  COSTS  85 

nerve  and  interest  to  driving  as  a  recreation.  But  this  multipli- 
cation of  little  strains  and  risks,  accumulating  in  a  long  day's 
work,  and  undertaken  day  after  day,  in  all  conditions  of  health, 
disposition  and  weather,  soon  passes  from  an  agreeable  and  stim- 
ulating exercise  into  a  toilsome  drudgery. 

Consideration  of  the  work  in  the  distributive  trades,  whole- 
sale and  retail,  which  absorb  an  ever-growing  proportion  of  our 
wage-earners,  is  most  instructive  for  understanding  the  respec- 
tive parts  played  by  specialisation,  duration,  and  compulsion  in 
the  human  costs.  Machinery  has  little  direct  control  over  the 
work  of  these  clerks,  warehousemen,  shop-assistants,  typists,  etc. : 
their  work  contains  constant  little  elements  of  variety  in  detail, 
and  a  moderate  amount  of  it  imposes  no  fatigue.  But  the  scope 
afforded  for  personal  skill  or  achievement  is  insufficient;  most  of 
it  is  unmeaning  and  uninteresting  so  far  as  useful  results  are  con- 
cerned; it  involves  constant  obedience  to  the  orders  of  another; 
and  it  is  unduly  prolonged. 

§  5.  We  are  now  in  a  position  to  sum  up  the  results  of  our  gen- 
eral analysis  of  the  human  costs  of  labour,  in  which  Tarde's  dis- 
tinction between  creation  and  imitation  or  repetition  was  our 
starting  point.  So  far  as  the  merely  or  mainly  physical  costs 
are  concerned,  the  muscular  and  nervous  strain  and  fatigue, 
excessive  repetition  is  a  true  description  of  the  chief  cause. 
Machine  tending  at  a  high  pace  for  a  long  working-day  is  in  it- 
self the  most  ' costly'  type  of  labour,  and,  in  so  far  as  a  machine 
controls  the  sort  and  pace  of  work  done  by  a  human  being,  these 
'costs'  accumulate.  But  most  work  is  not  so  directly  controlled 
by  machinery,  and  yet  is  so  highly  specialised  that  the  routine 
constantly  over-taxes  with  fatigue  the  muscles,  nerves  and  atten- 
tion. The  duration  and  pace  of  such  labour  are  usually  such  as 
to  heap  up  heavy  costs  of  physical  wear  and  tear  and  of  physical 
discomforts. 

But  the  antithesis  of  creation  and  imitation  or  repetition  has 
a  different  significance  for  the  interpretation  of  physical  costs. 
There  it  is  not  so  much  the  absence  of  novelty  involved  hi  repe- 
tition, as  the  absence  of  personal  liberty  and  spontaneity  that 
counts  most  heavily.  There  are,  in  fact,  few  sorts  of  necessary 
productive  labour  which  a  man  is  not  prepared  to  do  for  himself, 


86  WORK  AND  WEALTH 

with  some  measure  of  personal  satisfaction,  if  he  has  within  his 
own  control  the  performance  of  this  task  and  the  result.  But 
when  another's  will  and  purpose  supersede  his  own,  prescribing 
actions  to  be  done  under  conditions  of  time,  place  and  manner, 
determined  by  that  other,  this  servitude  to  another's  will  is  al- 
ways irksome  and  may  be  degrading.  The  human  cost  of  most 
domestic  service  lies  largely  here.  The  work  itself  has  more  de- 
tailed variety  and  interest  than  most,  and  where  the  housewife 
herself  does  it,  it  often  furnishes  a  net  fund  of  human  satisfaction. 
But  the  moral  and  intellectual  costs  of  a  hired  servant,  compelled 
to  obey  the  arbitrary  and  capricious  orders  of  a  mistress,  and  to 
suppress  her  own  will,  tastes  and  inclinations  in  the  execution 
of  her  task,  are  often  very  heavy.  In  a  smaller  degree  this  applies 
to  all  wage-earners  engaged  in  any  work  where  scope  for  their 
free  volition  is  technically  feasible.  To  substitute  another's  will 
for  one's  own,  in  matters  where  one  has  a  will,  is  always  a  human 
cost.  That  cost,  however,  need  not  be  great.  When  a  worker 
is  a  unit  of  labour  in  some  great  business,  his  actions  conforming 
to  rules  which,  however  troublesome,  belong  to  the  system,  the 
consciousness  of  loss  of  liberty  is  far  less  than  when  the  changing 
will  of  a  personal  employer  operating  amid  the  details  of  his  work 
is  the  instrument  of  discipline.  A  shop-girl  in  a  large  business 
has  a  feeling  of  greater  independence  than  a  domestic  servant, 
a  factory-hand  than  a  shop-girl,  while  the  low  wage  of  home- 
workers  is  in  part  attributable  to  the  removal  of  the  worker  from 
the  immediate  domination  of  the  employer's  will. 

§  6.  In  assessing  the  psychical  elements  of  cost,  it  is  well  to 
distinguish  those  related  to  a  loss  of  liberty,  or  an  encroachment 
upon  personality,  from  those  which  are  the  conscious  results  or 
counterparts  of  the  physical  strains.  For  the  enlargement  of 
certain  of  these  psychical  costs  is  an  exceedingly  important  factor 
in  what  is  called  ' industrial  unrest'.  This  irksomeness  of  nar- 
rowly specialised  labour  and  of  the  'enslaving'  conditions  of  the 
ordinary  working  life  grows  with  the  growth  of  intelligence  and 
sensibility  among  the  working-classes.  Under  the  older  order, 
of  accepted  class  distinctions  and  economic  status,  implicit  obe- 
dience to  the  employer's  will  carried  no  conscious  moral  cost.  A 
new  sense  of  personal  dignity  and  value  has  now  arisen  in  the 


THE  DISTRIBUTION  OF  HUMAN  COSTS  87 

better  educated  grades  of  workers  which  interferes  with  arbi- 
trary modes  of  discipline.  When  they  are  called  upon  to  do  work 
in  a  way  which  appears  to  them  foolish,  injurious,  or  inequitable, 
a  sense  of  resentment  is  aroused  which  smoulders  through  the 
working  week  as  a  moral  cost.  With  every  widening  of  education 
there  comes,  moreover,  a  discontent  not  merely  with  the  particu- 
lar conditions  of  the  labour,  but  with  the  whole  system,  or  set 
of  conditions,  which  addicts  so  large  a  proportion  of  their  working 
hours  and  energies  to  the  dull  heavy  task  by  which  they  earn 
their  living.  So  too  the  narrow  limitation  in  the  choice  of  work 
which  the  local  specialisation  of  industry  involves,  becomes  a 
growing  grievance.  The  'conditions  of  labour'  for  themselves 
and  others,  taken  as  a  whole,  are  realised  as  an  invasion  and  a 
degradation  of  their  humanity,  offering  neither  stimulus  nor 
opportunity  for  a  man  to  throw  '  himself '  into  his  work.  For  the 
work  only  calls  for  a  fragment  of  that  'self'  and  always  the  same 
fragment.  So  it  is  true  that  not  only  is  labour  divided  but  the 
labourer.  And  it  is  manifest  that,  so  far  as  his  organic  human 
nature  is  concerned,  its  unused  portions  are  destined  to  idleness, 
atrophy,  and  decay. 

This  analysis  of  the  conditions  may  seldom  be  fully  realised 
in  the  consciousness  of  the  worker.  But  education  has  gone  far 
enough  to  make  them  real  factors  of  working-class  discontent. 
They  constitute  a  large  motive  in  the  working-class  movement 
which  we  may  call  the  revolt  of  the  producer  against  the  exces- 
sive human  costs  of  his  production. 

This  is  the  great  and  serious  indictment  against  the  economy 
of  division  of  labour.  Associated  with  it  is  the  charge  that  the 
worker  in  one  of  these  routine  subdivided  processes  has  no  ap- 
preciation of  the  utility  or  social  meaning  of  his  labour.  He  does 
not  himself  make  anything  that  is  an  object  of  interest  to  him. 
His  contribution  to  the  long  series  of  productive  processes  that 
go  to  turn  out  a  commodity  may  be  very  valuable.  But,  as  he 
cannot  from  his  little  angle  perceive  the  cooperative  unity  of  the 
productive  series,  it  means  nothing  to  his  intelligence  or  heart. 

So  not  only  does  the  performance  of  his  task  afford  him  no 
satisfaction,  but  its  end  or  object  is  a  matter  of  indifference  to 
him.  There  is  this  vital  difference  between  the  carpenter  who 


88  WORK  AND  WEALTH 

makes  a  cupboard  or  a  door,  fits  it  into  its  place  and  sees  that  it 
is  good,  and  the  bricklayer's  labourer  who  merely  mixes  mortar 
and  carries  bricks  upon  a  hod.  A  man  who  is  not  interested  in 
his  work,  and  does  not  recognise  in  it  either  beauty  or  utility,  is 
degraded  by  that  work,  whether  he  knows  it  or  not.  When  he 
comes  to  a  clear  consciousness  of  that  degradation,  the  spiritual 
cost  is  greatly  enhanced.  It  is  true  that  specialisation  in  labour 
is  socially  useful,  and  that,  if  that  specialisation  does  not  en- 
croach too  largely  upon  the  energy  and  personality  of  the  in- 
dividual worker,  he  is  not  injured  but  helped  by  the  contribu- 
tion to  social  wealth  which  his  special  work  enables  him  to  make. 
Larger  enlightenment  as  to  the  real  meaning  and  value  of  his 
work,  and  the  sense  of  social  service  which  should  follow,  may 
indeed  be  expected  to  reduce  considerably  the  irksomeness  of 
its  present  incidence.  But  it  can  do  so  only  upon  two  conditions. 
In  the  first  place,  the  duration  and  strain  upon  his  physical  and 
moral  nature  must  be  diminished.  Secondly,  the  general  con- 
ditions both  of  labour  and  of  its  remuneration  must  be  such  as 
to  lead  him  to  recognise  that  the  discipline  which  it  enjoins  is 
conducive  to  a  larger  liberty,  viz.  that  of  willing  cooperation 
with  his  fellows  in  the  production  of  social  welfare.  As  yet  the 
attainment  of  these  conditions  has  not  kept  pace  with  the  new 
desires  and  aspirations  which  have  grown  so  rapidly  among  the 
rank  and  file  of  workers  in  the  advanced  industrial  countries. 
Hence  a  new  burden  of  spiritual  costs,  expressing  an  increased 
divergence  between  conscious  aspirations  and  the  normal  con- 
ditions of  the  worker's  lot.  The  education  of  the  town  worker, 
the  association  with  his  fellows  in  large  workshops,  the  life  of 
the  streets,  the  education  of  the  school,  the  newspaper,  the  li- 
brary, the  club,  have  made  him  increasingly  sensitive  to  the 
narrowness  and  degradation  of  excessive  routine  in  joyless  labour. 


CHAPTER  VIII 

HUMAN  COSTS  IN  THE   SUPPLY  OF  CAPITAL 

§  i.  So  far,  in  discussing  the  human  'costs'  of  production,  we 
have  confined  our  attention  to  the  activities  of  body  and  mind 
directly  operative  in  producing  marketable  goods  or  services, 
grading  them  from  the  creative  and  generally  'costless'  work 
of  the  artist  and  inventor  to  the  repetitive  and  'costly'  work  of 
the  routine  manual  labourer.  We  now  proceed  to  examine  the 
human  costs  involved  in  the  processes  of  providing  the  capital 
which  cooperates  with  labour  in  the  various  productive  opera- 
tions. The  economic  'costs',  for  which  payment  is  made  out 
of  the  product  to  capital,  are  two,  risk-taking  and  saving.  What 
are  the  human  costs  involved  in  these  economic  costs? 

To  clear  the  ground  for  this  enquiry  it  will  be  well  to  begin  by 
making  plain  the  sense  in  which  risk-taking  and  saving  are  'pro- 
ductive' activities.  Neither  of  them  is  'work'  in  the  ordinary 
organic  sense  of  the  application  of  muscle  or  nervous  energy  to 
the  production  of  wealth.  Both  would  rather  be  considered  as 
activities  of  the  human  will  and  judgment  which  increase  the 
efficiency  of  the  directly  productive  operations.  Their  produc- 
tivity may  thus  be  regarded  as  indirect.  But  it  is  none  the  less 
real  and  important  on  that  account.  For  unless  there  was  post- 
ponement of  some  consumption  which  might  have  taken  place, 
and  the  application  of  the  non-consumptive  goods,  which  this 
postponement  enabled  to  come  into  existence,  to  uses  involving 
risks  of  loss,  'work'  would  be  very  unproductive  in  comparison 
with  what  it  is. 

Risk-taking,  the  giving  up  of  a  present  certain  utility  or  sat- 
isfaction for  the  chance  of  a  larger  but  less  certain  satisfaction 
in  the  future,  is,  we  know,  the  essence  of  business  enterprise. 
Such  enterprise  by  no  means  always  entails  a  human  cost.  In 
industry,  as  in  all  human  functions,  experiments,  involving  risk, 
are  frequently  a  source  of  vital  interest  and  of  conscious  satis- 

89 


90  WORK  AND  WEALTH 

faction.  There  are  two  roots  of  this  satisfaction,  the  staking  of 
one's  judgment  and  skill  in  forecasting  and  determining  future 
events,  and  the  actual  joy  of  hazard.  The  former  is  a  common 
trait  of  intelligent  personality,  the  latter  a  powerful,  though  less 
general  motive,  involving  a  'sporting'  interest  in  life.  The  spirit 
of  adventure  applied  to  business,  enhances  the  conscious  values. 
Whether  it  be  motived  by  some  physical  restlessness  or  by  some 
element  of  faith,  it  must  be  accounted  an  organic  good,  alike  as 
means  and  end.  If  all  the  risk-taking  involved  in  current  in- 
dustry were  of  this  nature,  it  would  not  then  figure  in  our  bill 
of  human  costs,  but  on  the  other  side  of  the  account.  But  where 
the  conditions  of  actual  business  impose  elements  of  risk  that  are 
either  in  kind  or  magnitude  compulsory,  not  voluntary,  not  only 
does  no  satisfaction  attend  the  taking  of  these  risks,  but  consid- 
erable loss  and  suffering  may  accrue.  Risks  that  are  either  great 
in  themselves  or  great  in  relation  to  the  capacity  to  bear  them  are 
frequently  required  by  the  conditions  of  modern  business  enter- 
prise. The  men  who  undergo  these  risks  do  not  deliberately  or 
with  express  intention  stake  their  faith  and  foresight  on  a  game 
of  gain  or  loss,  or  even  enter  into  the  risks  with  the  gambler's 
zest.  They  undergo  these  risks  because  they  cannot  help  them- 
selves, and  the  anxiety  attendant  on  these  risks  is  often  one  of  the 
heaviest  psychical  and  physical  costs  of  the  business  man. 

§  2.  In  analysing  risk-taking  as  a  special  cost  of  capital,  I  must 
guard  against  one  misunderstanding.  Risk-taking,  of  both  sorts, 
humanly  good  and  humanly  bad,  is  not  of  course  by  any  means 
confined  to  administration  of  capital.  Everyone  who,  either  by 
choice  or  by  the  necessity  of  his  situation,  devotes  his  personal 
energies  to  making  any  product  for  the  market,  or  to  improving 
some  personal  capacity  with  a  view  to  its  productive  use,  incurs 
risks.  In  some  cases  the  risks  may  not  indeed  entail  real  human 
waste,  as  where  the  artist  or  inventor  speculates  with  his  crea- 
tive faculty.  Or  the  professional  man,  preparing  for  his  career, 
may  willingly  and  with  zest  enter  a  competition  in  which  prizes 
are  few.  Men  equipped  with  vigorous  intellect  and  determina- 
tion will  get  out  of  the  struggle  for  professional  or  commercial 
success  a  satisfaction  of  which  the  risk  of  failure  is  a  necessary 
condition.  But  for  most  men  a  small  quantum  of  hazard 


HUMAN  COSTS  IN  THE  SUPPLY  OF  CAPITAL        91 

suffices.  A  little  risk  may  stimulate  but  a  larger  risk  will  depress 
efficiency.  A  doctor,  a  lawyer,  an  engineer  is  willing  to  put  his 
natural  and  acquired  ability  against  those  of  his  fellows  in  a  fair 
field  where  the  chances  of  success  are  reasonably  large.  But  when 
the  risks  are  so  numerous  and  so  incalculable  as  they  are  to-day 
in  most  professional  careers,  the  anxiety  they  cause  must  be 
accounted  a  heavy  human  cost.  The  same  applies  to  the  career 
of  most  modern  business  men.  It  also  constitutes  a  new  and 
growing  cost  of  labour. 

For  though  it  may  be  true  that  the  actual  risks  of  a  working 
life,  personal  or  economic,  are  no  greater  than  in  former  times, 
the  emotional  and  intellectual  realisation  of  these  risks  is  grow- 
ing. Education  enables  and  compels  the  intelligent  workman  to 
understand  the  precarious  nature  of  his  livelihood,  and  his  grow- 
ing sensibility  accumulates  in  'worry'.  This  is  certainly  one  of 
the  main  sources  of  'industrial  unrest '. 

But  though  risk- taking  thus  enters  as  a  human  cost  into  the 
life  of  other  owners  of  productive  powers,  we  do  right  to  accord 
it  special  attention  in  relation  to  the  supply  of  capital.  For  in 
the  provision  of  all  forms  of  capital,  and  in  the  payment  for  its 
use,  risk-taking  is  an  element  of  primary  importance,  and,  though 
in  theory  separable  from  the  act  of  abstinence,  postponement,  or 
waiting,  which  comes  into  prominence  as  the  direct  psychical 
cost  of  saving,  it  is  not  separable  in  industrial  practice. 

§  3.  Let  us  first  examine  the  economic  costs  involved  in  the 
provision  of  industrial  capital.  That  process  consists  in  making, 
or  causing  to  be  made,  non-consumable  goods,  which  are  useful 
for  assisting  the  future  production  of  consumable  goods,  instead 
of  making,  or  causing  to  be  made,  directly  consumable  goods. 
We  need  not  discuss  at  length  the  shallow  criticism  pressed  by 
some  socialists  to  the  effect  that  since  labour  makes  all  goods 
whether  non-consumable  or  consumable,  the  only  economic  and 
human  cost  of  providing  these  forms  of  capital  is  the  productive 
energy  of  labour.  For  the  decision  and  effort  of  mind  or  will, 
which  determines  that  non-consumables  shall  be  made  instead 
of  consumables,  proceeds  not  from  the  labour  employed  hi  making 
them,  but  from  the  owners  of  income  who  decide  to  save  instead 
of  spending.  This  decision  to  save  instead  of  spending  is  the 


92  WORK  AND  WEALTH 

economic  force  which  causes  so  much  of  the  productive  power 
of  labour  to  occupy  itself  in  making  non-consumables.  It  is  of 
the  first  importance  that  the  ordinary  business  man,  to  whom 
'saving'  is  apt  to  mean  putting  money  in  a  bank,  or  buying 
shares,  shall  realise  the  concrete  significance  of  his  action.  What 
he  is  really  doing  is  causing  to  be  made  and  to  be  maintained 
some  addition  to  the  existing  fabric  of  material  instruments  for 
furthering  the  future  production  of  commodities.  This  is  not, 
as  it  may  at  first  appear,  a  single  act  of  choice,  the  determination 
to  use  a  portion  of  one's  income,  say  £100,  in  paying  men  to 
make  steel  rails  or  to  put  up  a  factory  chimney,  instead  of  pay- 
ing them  to  make  clothes,  furniture,  or  wine  for  one's  current 
consumption.  The  effort  of  postponement,  or  the  preference  of 
uncertain  future  for  certain  present  consumables,  necessary  for 
supplying  capital,  if  it  is  an  effort,  is  a  continuous  one  lasting  all 
the  time  the  capital  is  in  use.  The  critic  who  asks,  why  a  single 
'act  of  abstinence'  which  is  past  and  done  with  should  be  re- 
warded by  a  perpetual  payment  of  annual  interest,  fails  to  real- 
ise that,  so  far  as  saving  involves  a  serviceable  action  of  the  saver, 
it  goes  on  all  the  time  that  the  saver  lies  out  of  the  full  present 
enjoyment  of  his  property,  i.  e.  as  long  as  his  savings  continue  to 
function  as  productive  instruments. 

This  view,  of  course,  by  no  means  begs  the  question  whether 
there  is  of  necessity  and  always  some  human  cost  or  sacrifice 
involved  in  such  a  process  of  saving.  It  is,  indeed,  clear  that  a 
good,  deal  of  capital  may  be  supplied  without  any  human  costs 
either  in  postponement  of  current  satisfaction  or  in  risk-taking. 
The  squirrel  stores  nuts  by  an  organic  instinct  of  economy 
against  the  winter,  as  the  bear  stores  fat.  The  thrifty  housewife 
lays  up  provisions  by  a  calculation  hardly  less  instinctive  against 
the  probable  requirements  of  the  family  in  the  near  future.  The 
balancing  of  future  against  present  satisfaction,  involved  in  such 
processes,  cannot  be  considered  as  involving  any  human  cost, 
but  rather  some  slight  balance  of  utility.  I  am  certainly  in  no 
sense  the  loser  in  that  I  do  not  lay  out  all  my  income  the  same 
day  that  I  receive  it  in  purchasing  immediate  satisfaction.  Why 
I  am  not  the  loser  is  evident.  The  first  5  per  cent  of  my  income 
I  can  perhaps  spend  advantageously  at  once  upon  necessaries 


HUMAN  COSTS  IN  THE  SUPPLY  OF  CAPITAL        93 

and  comforts  which  contribute  immediately  to  my  welfare.  But 
if  I  know  the  sum  has  got  to  last  me  for  six  months,  it  will  evi- 
dently pay  me  in  organic  welfare  to  spread  nearly  all  the  rest  in 
a  series  of  expenditures  over  the  whole  period,  so  that  I  may  have 
these  necessaries  and  comforts  all  the  time.  If  my  income  is  no 
more  than  just  sufficient  to  keep  me  in  full  health,  i.  e.  in  provid- 
ing vital  'necessaries',  organic  welfare  demands  a  quite  even  ex- 
penditure, entailing  the  proper  quantity  of  postponement.  If 
there  is  anything  over  for  expenditure  on  unnecessaries,  this  will 
not  be  quite  evenly  spread  over  the  six  months.  For  any  com- 
forts it  affords  appear  to  bring  more  pleasure  if  enjoyed  now  than 
in  three  or  six  months'  time.1  And,  besides,  there  is  the  question 
of  uncertainty  of  life,  upon  the  one  hand,  and  the  risk  of  being 
unable  to  get  hold  of  the  future  comforts  when  I  may  want  them. 
This  depreciation  of  future  as  compared  with  present  satisfaction 
and  these  risks  will  properly  induce  me  to  grade  downwards  the 
expenditure  on  comforts  during  the  period  in  question.  But  in 
this  laying  out  of  my  income,  so  as  to  secure  for  myself  the  max- 
imum of  satisfaction  and  utility,2  there  is  no  human  cost  or 
sacrifice.  On  the  contrary,  any  failure  to  'save'  or  'postpone* 
might  be  attended  by  a  heavy  cost.  Many  a  savage  has  died 
of  starvation  because  he  has  gorged  to  repletion  instead  of  storing 
food  to  tide  him  over  till  he  gets  possession  of  a  new  supply.  Thus 
this  simplest  economy  of  saving,  the  spreading  of  consumption 
over  a  period  of  time,  is  evidently  costless. 

§  4.  Now,  though  the  saving  which  consists  in  keeping  stores 
of  consumables  for  future  consumption  does  not  furnish  what 
would  be  called  capital,  and  so  does  not  come  directly  within  the 
scope  of  our  particular  enquiry  into  'costs  of  capital,'  it  gives  a 
useful  test  for  the  economy  of  saving  under  modern  capitalism. 
The  modern  saver  does  not,  indeed,  usually  keep  in  his  possession 
for  future  consumption  a  store  of  consumable  goods.  It  would 

1  Observe  that  this  appearance  is  illusory.    The  maximum  of  organic  utility 
would  probably  involve  an  even  expenditure  of  all  the  elements  of  income  with- 
out allowance  for  my  preference  of  present  over  future. 

2  It  may  be  urged  that,  even  in  respect  of  necessaries,  there  will  be  some  discount 
for  future  as  compared  with  present  consumption.    But  in  any  class  of  civilised  men, 
whose  income  is  paid  at  long  intervals,  this  discount  will  be  very  small  and  may 
be  ignored. 


94  WORK  AND  WEALTH 

be  inconvenient  to  store  them,  many  of  them  are  by  nature 
perishable  and  so  incapable  of  storage.  Besides,  modern  indus- 
try affords  him  a  way  of  making  industrial  society  store  them  for 
him,  or,  more  strictly,  makes  it  produce  a  constant  supply  of 
fresh  consumables  to  which  he  can  get  access.  Nay,  it  provides 
still  better  for  his  needs,  for  it  enables  him,  by  postponing  some 
present  consumption  to  which  he  is  entitled,  not  merely  to  take 
out  of  the  constant  social  supply  the  full  equivalent  of  his  post- 
poned consumption  at  any  time  he  chooses,  but  to  receive  an 
additional  small  regular  claim  upon  other  consumptive  or  pro- 
ductive goods,  called  interest. 

This  extra  payment  was  regarded  by  the  classical  economists 
as  a  cost  or  price  paid  for  an  effort  of  abstinence.  More  recent 
economists  have  usually  chosen  to  substitute  for  abstinence 
'waiting'  or  some  equally  colourless  term.  But  abstinence  is 
better,  for  it  does  suggest  a  painful  effort  involving  some  human 
cost,  some  play  of  motives  naturally  adverse  to  saving  which  re- 
quires to  be  overcome  by  a  positive  economic  payment.  Thus, 
not  merely  the  economic,  but  the  moral  or  human  necessity  of 
interest  is  best  asserted. 

This  abstinence  or  postponement  of  possible  present  consump- 
tion of  commodities  is  admittedly  the  condition  or  even  the  cause 
of  the  supply  of  the  productive  instruments  which  increase  the 
production  of  future  wealth  and  incidentally  furnish  the  fund  out 
of  which  the  interest  is  paid.  For  our  present  purpose,  then,  it 
makes  no  difference  whether  we  look  at  the  primitive  saving  which 
stored  consumables  for  future  use,  or  the  modern  saving  which 
causes  productive  instruments  to  be  created,  applied  and  main- 
tained. The  question  whether  there  are  human  costs  of  saving, 
and  what  they  are,  is  in  the  last  resort  the  same  in  both  cases. 

Out  of  any  individual,  or  social,  income  a  certain  amount  or 
proportion  of  saving  evidently  may  be  'costless'  in  the  human 
sense.  That  is  to  say,  the  person  or  society  that  saves  it  sustains 
no  organic  loss  or  injury  by  doing  so,  though  he  may  sometimes 
think  or  feel  he  does.  If  he  does  so  think  or  feel,  society  must 
set  a  counter-weight  against  this  false  imaginary  loss,  in  the  shape 
of  interest.  But,  as  we  have  already  noted,  there  is  a  good  deal 
of  saving  which  represents  the  calculated  outlay  over  a  period  of 


HUMAN  COSTS  IN  THE  SUPPLY  OF  CAPITAL        95 

time,  which  the  owner  of  an  income  will  make  in  his  own  interest. 
In  such  cases  there  is  no  human  cost,  and  if  an  economic  cost 
(interest)  is  defrayed,  it  has  no  human  correlative.  From  the 
standpoint  of  human  distribution  of  wealth  it  involves  a  waste. 

The  organic  utility  to  individuals  of  hoarding,  in  order,  by 
distributing  consumption  over  a  longer  period  of  time,  to  get 
from  it  a  larger  aggregate  of  goods,  will  thus  furnish  a  consider- 
able quantity  of  instrumental  capital  to  modern  industry.  For, 
only  by  putting  the  postponed  consumption  into  the  form  of  in- 
strumental capital,  can  the  savers  establish  the  lien  they  want 
upon  the  future  output  of  consumables.  If  all  the  required  cap- 
ital could  be  got  by  this  simple  play  of  motives,  the  savers  bal- 
ancing more  useful  future  units  of  consumption  against  less  useful 
present  units,  with  due  allowance  for  risks  connected  with  post- 
ponement, the  supply  of  capital  would  be  humanly  'costless.' 
Though  some  element  of  risk,  inherent  in  the  proceeding,  would, 
-  taken  by  itself,  carry  a  cost,  the  superior  utility  attaching  to  the 
postponed  units  of  consumption,  as  compared  with  that  which  the 
same  number  of  units  would  afford  when  added  to  the  consump- 
tion already  provided,  would  offset  that  cost,  so  that  the 
arrangement,  as  a  whole,  would  be  costless. 

§  5.  Though  the  method  of  our  analysis  has  obliged  us  to  ap- 
proach this  problem  of  saving  as  part  of  our  enquiry  into  proc- 
esses of  production,  because  it  is  the  means  by  which  a  produc- 
tive factor,  viz.  capital,  is  supplied,  it  appertains  directly  to 
the  process  of  consumption,  or  outlay  of  income  on  consumables. 
As  the  current  expenditure  of  any  member  of  industrial  society 
will  be  distributed  among  a  number  of  different  purchases,  con- 
tributing by  natural,  conventional,  or  purely  personal  connec- 
tions, towards  a  standard  of  consumption  endowed  with  maxi- 
mum utility  (or  what  the  consumer  takes  for  such),  so  will  it  be 
with  the  distribution  of  expenditure  over  points  of  time.  Let 
us  elevate  into  a  clear  conscious  policy  of  calculation  what  is  in 
large  measure  a  blind  instinctive  conduct,  and  the  organic  relation 
between  the  two  '  economies '  is  apparent.  It  involves  an  intricate 
balancing  of  larger  future  utilities,  weighted  by  risks,  against 
smaller  present  utilities  not  so  weighted.  To  take  the  simplest 
instance.  If,  out  of  an  income  of  £600  coming  in  this  year,  I 


96  WORK  AND  WEALTH 

decide  to  consume  £500  in  the  current  expenditure  of  the  year 
and  to  put  aside  £100  for  consumption  in  five  years'  time  (when 
I  purpose  to  work  only  half-time  and  earn  only  half  my  present 
income),  I  shall  have  estimated  that  the  luxuries  which  I  could 
buy  this  year  by  the  sixth  hundred  pounds  expenditure  are 
slightly  less  agreeable  or  'useful'  to  me  than  the  comforts  pur- 
chasable by  the  fourth  hundred  pounds  as  visualised  five  years 
off,  with  an  allowance  for  the  chance  that  I  may  then  be  dead,  or 
that  I  may  have  come  into  a  legacy  which  renders  this  postpone- 
ment of  consumption  unnecessary.  In  a  word,  this  economic  ego 
must  be  conceived  as  operating  by  a  plan  of  outlay  which,  in 
regard  to  the  disposal  of  the  current  income,  has  a  longitude  and 
latitude  of  survey  and  valuation.  Just  as  the  different  ingredients 
of  present  consumption  make  a  complex  organic  whole  with  del- 
icately proportioned  parts,  the  size  and  form  of  each  dictated  by 
the  unified  conception  of  the  current  standard  of  comfort,  so 
the  disposition  of  the  income  over  a  series  of  points  of  time  in 
which  present  values  of  each  several  consumable  and  of  the 
whole  standard  are  compared  with  future  values,  involves  the 
similar  application  of  a  plan  for  the  realisation  of  my  economic 
ideal.  Though  a  fully  rational  conception  and  calculus,  either 
for  the  composition  of  current  expenditure  or  for  prospective 
outlays,  is  very  rare,  some  half-conscious,  half-instinctive  cal- 
culus of  the  sort  must  be  accredited  to  everybody.1  So  far  as  it 
is  rightly  conducted  by  their  reasoning  or  just  instinct,  it  means 
that,  out  of  all  or  most  of  the  members  of  an  industrial  society, 
some  humanly  costless  saving  could  be  got,  some  contribution 
towards  the  socially  desirable  fund  of  capital. 

§  6.  As,  then,  we  have  seen  that  a  certain  proportion  of  the 
various  current  activities,  which  are  directly  productive  in  the 
shape  of  skilled  and  unskilled  labour  of  brain  and  hand,  are 
either  humanly  costless  or  carry  some  positive  fund  of  human 
utility,  so  is  it  also  with  the  processes  of  saving  and  risk-taking, 
which  go  to  the  supply  and  maintenance  of  capital.  It  is  not 
difficult  to  conceive  a  society  in  which  all  the  saving  needed  for 
the  normal  development  of  industry  might  be  costless.  In  a 
primitive  society,  based  chiefly  on  agriculture  and  simple  handi- 
1  For  a  discussion  of  the  nature  and  limitations  of  this  calculus  see  Chapter  XXI. 


HUMAN  COSTS  IN  THE  SUPPLY  OF  CAPITAL        97 

crafts,  one  might  find  the  bulk  of  the  working  population  earn- 
ing a  secure  and  sufficient  livelihood,  but  with  no  margin  of  sav- 
ings for  instrumental  capital.  The  comparatively  small  amount 
of  such  capital  as  was  needed  might  be  furnished  mainly  or  en- 
tirely from  the  surplus  incomes  of  a  landowning  or  a  governing 
class,  extracted  as  rent  or  taxes.  Of  course,  if,  as  would  com- 
monly occur,  such  rents  or  taxes  were  extorted  from  the  peas- 
antry by  starving  them  or  by  imposing  a  burden  of  excessive 
toil,  the  human  costs  of  such  saving  would  be  very  heavy.  But 
where  a  class  of  feudal  lords  drew  moderate  rents  and  fines  from 
their  tenants,  or  where  a  governing  caste,  such  as  the  Incas  in 
ancient  Peru,  applied  to  useful  public  works  a  large  share  of  what 
would  be  called  the  'economic  rent'  of  the  country,  taken  in  taxa- 
tion, such  saving  need  entail  no  human  cost.  Nor  is  such  costless 
provision  of  capital  necessarily  confined  to  a  society  living  under 
simple  industrial  conditions  in  which  comparatively  little  saving 
can  be  utilised.  Even  in  an  advanced  industrial  society  the  large 
incessant  increments  of  capital  might  be  provided  costlessly.  For 
if  the  national  dividend  were  not  only  very  large  but  so  well  or 
equably  distributed,  as  income,  that  all  classes  had  more  than 
enough  to  satisfy  their  current  organic  needs,  such  a  society  would, 
by  a  virtually  automatic  economy,  secrete  stores  of  capital  to 
meet  the  future  needs  of  a  growing  population  or  a  rising  standard 
of  consumption,  as  every  animal  organism  naturally  lays  up 
stores  of  fat,  muscle  and  physical  energy,  for  future  use. 

A  well-ordered  socialistic  state,  were  such  possible,  would  cer- 
tainly apply  the  industrial  forces  at  its  disposal,  so  as  to  secure 
an  adequate  supply  of  costless  capital.  After  making  proper 
provision  out  of  current  industry  for  the  physical  and  moral 
health  of  the  whole  population,  and  for  normal  progress  in  per- 
sonal efficiency  of  work  and  life,  it  would  apply  the  surplus  of 
industrial  energy  to  improving  the  capital  fabric  of  industry  so 
as  to  provide  for  the  production  of  increasing  wealth,  leisure, 
and  other  opportunities  in  the  future.  The  calculation,  as  to 
what  proportion  of  current  industrial  energy  should  be  thus  ap- 
plied to  preparing  future  economic  goods  to  ripen  for  utility  at 
various  distances  of  time,  would  of  course  be  a  delicate  opera- 
tion. But  so  far  as  it  were  correctly  carried  out,  it  would  be 


98  WORK  AND  WEALTH 

socially  costless.  For  on  the  hypothesis  that  adequate  provision 
for  current  needs  of  individual  stability  and  progress  had  been 
a  first  charge  on  the  industrial  dividend,  the  postponement  of 
any  additional  consumption  involved  in  social  saving  could  not 
rightly  be  regarded  as  involving  any  net  human  cost.  For,  if, 
instead  of  the  surplus  being  saved,  it  had  been  paid  out  to  in- 
dividual members  of  society  for  current  consumption,  it  would 
ex  hypothesi  be  unproductive  of  organic  welfare,  being  applied  in 
an  injurious  and  wasteful  attempt  to  force  the  pace  of  advances 
in  the  current  standard  of  living.  Applying  the  organic  meta- 
phor, one  would  say  that  it  was  a  natural  function  of  an  organ- 
ised society  to  secrete  capital  in  due  quantity  for  its  future 
life. 

§  7.  But  how  far  can  it  be  held  that  an  industrial  society  like 
ours  is  so  organised  as  'naturally'  to  secrete  the  'right'  quantity 
of  capital,  to  provide  it  in  a  costless  way,  and  to  distribute  it 
economically  among  its  various  uses?  A  full  answer  to  these 
questions  must  be  deferred  until  our  analysis  of  the  consumption 
side  of  the  national  dividend  enables  us  to  assess  the  human 
utility  of  the  productive  work  to  which  capital  is  applied.  At 
present  we  must  assume  the  utility  of  the  £300,000,000  of  savings 
applied  out  of  the  aggregate  national  income  to  the  enlargement 
of  industry,  and  confine  ourselves  to  enquiring  what  proportion 
of  this  amount  is  likely  to  be  'costless'  and  how  to  estimate  the 
'human  costs'  attached  to  the  other  part.  It  is,  of  course,  quite 
evident  that  such  answer  as  can  be  given  is  of  a  general  and  spec- 
ulative nature,  with  no  pretence  at  quantitative  exactitude. 

In  considering  savings  with  an  eye  to  discovering  the  human 
costs,  it  will  be  well  to  classify  these  savings  under  three  heads. 
First  will  come  what  may  be  termed  the  automatic  saving  of  the 
surplus  income  of  the  rich,  that  which,  remaining  over,  after  all 
wants,  inclusive  of  luxuries,  are  satiated,  accumulates  for  invest- 
ment. The  proportion  of  new  capital  proceeding  from  this 
source  will  vary  with  the  amount  and  regularity  of  such  income, 
its  distribution  among  the  rich,  and  their  attitude  of  mind  to- 
wards the  expenditure  of  their  incomes.  The  automatic  or  spon- 
taneous character  of  this  saving  is  due  to  the  fact  that  no  close 
relation  exists  between  progress  in  industry  and  the  evolution 


HUMAN  COSTS  IN  THE  SUPPLY  OF  CAPITAL        99 

of  a  personal  standard  of  consumption.  Sudden  rapid  advances 
of  income  are  not  usually  accompanied  by  a  corresponding  pres- 
sure of  new  personal  wants  tending  immediately  to  absorb  in 
increasing  expenditure  each  increase  of  income.  Though  no 
limit  can  be  set  upon  the  expenses  of  a  luxurious  standard  of  con- 
sumption and  the  vagaries  of  personal  extravagance,  expensive 
habits  take  time  for  their  establishment,  and  in  a  progressive  in- 
dustrial society  where  skilful,  or  lucky,  business  men  are  making 
fortunes  rapidly,  their  acquisitive  power  will  be  apt  to  run  far 
ahead  of  their  consumptive  practice.  Moreover,  the  absorption 
in  the  practice  of  making  money  evidently  retards  the  full  ac- 
quisition of  habits  of  lavish  expenditure,  giving  full  scope  to  the 
development  neither  of  tastes  nor  of  opportunities.  This  will 
be  particularly  true  of  incomes  growing  not  by  regular  incre- 
ments but  by  sudden  rushes.  Extreme  instances  abound  in  the 
recent  history  of  America.  Where  the  quick  skilful  seizure  of 
new  sudden  opportunities,  conjoined  with  a  general  development 
of  national  resources  at  an  abnormally  rapid  pace,  enables  a 
Jay  Gould  or  a  John  D.  Rockefeller  to  amass  millions  within  a 
few  years,  a  wide  natural  divergence  is  created  between  income 
and  expenditure.  Enormous  masses  of  unspent  income  thus  roll 
up  into  capital  which  again  continually  grows  by  the  accumula- 
tion of  the  unspent  interest  it  earns.  Though  the  number  of 
persons  in  this  position  of  financial  magnitude  is  very  few,  a 
considerable  class  of  successful  business  men  in  America  and  in 
every  advanced  European  country  comes  into  the  same  category 
as  regards  capacity  of  saving.  While  their  personal  and  family 
expenditure  may  be  continually  rising,  it  will  tend  to  keep  in 
safe  adjustment  to  what  may  be  termed  a  conservative  estimate 
of  their  income.  The  occasional  great  trading  coups,  the  enor- 
mous profits  of  a  commercial  or  financial  boom,  will  not  even  tend 
to  be  assimilated  in  expenditure. 

Wherever  the  economic  circumstances  of  a  country  are  such 
as  to  throw  a  large  proportion  of  the  growing  wealth  into  the 
hands  of  a  class  of  busy  rising  men,  by  a  series  of  great  windfalls 
or  more  or  less  incalculable  increments,  the  new  capital  flowing 
from  these  superfluous  incomes  will  be  large.  Moreover,  so  far 
as  it  is  automatic,  it  will  have  little  if  any  regard  to  rate  of  in- 


ioo  WORK  AND  WEALTH 

terest,  and  thus  to  'social  demand',  so  far  as  interest  can  be 
considered  a  just  index  of  social  demand.1 

Even  when  the  element  of  fluctuating  or  fortuitous  increase 
of  income  is  not  present,  a  fairly  rapid  advance  of  income,  par- 
ticularly where  it  is  'earned'  and  therefore  carries  no  presump- 
tion of  indefinite  continuance,  will  ordinarily  leave  a  considerable 
margin  of  automatic  saving.  This  will  be  larger  where  the  stand- 
ard of  living  is  already  established  on  a  high  level.  For  though 
certain  curious  psychological  traits  seem  to  show  an  extraordi- 
nary concentration  of  personal  interest  in  the  extravagances 
which  give  personal  distinction  in  'society',  the  low  pressure  of 
organic  utility,  or  the  emergence  of  positive  disutility  inherent 
in  many  of  these  forms  of  luxury,  must  be  considered  to  exer- 
cise some  check.  Putting  the  matter  simply,  one  would  say  that 
real  primary  human  needs  are  more  readily  assimilated  in  a  stand- 
ard of  consumption  than  purely  conventional  or  positively  in- 
jurious modes  of  expenditure.  So,  making  every  allowance  for 
the  depravity  of  tastes  and  the  zest  for  competitive  extravagance, 
it  will  remain  true  that  the  classes  with  large  incomes  will  tend 
to  contribute  to  capital  a  large  amount  of  surplus  income  by  a 
process  of  automatic  accumulation. 

For  such  saving  there  is  neither  an  economic  nor  a  human  cost 
involved :  the  interest  it  receives  is  in  the  economic  sense  as  much 
a  'surplus'  as  the  rent  of  land.  Not  merely  is  there  no  human 
cost,  there  is  a  positive  human  utility  in  such  saving,  for  it  is  an 
instinctive  rejection  of  the  injurious  effort  to  incorporate  this 
surplus  in  a  current  expenditure  already  adequate  to  satisfy  all 
felt  wants,  good  or  bad. 

It  is  likely  that  a  large  and  a  growing  proportion  of  the  total 
volume  of  saving  in  England  and  in  the  Western  world  is  of  this 
order.  For  though  it  may  not  be  generally  true  that  the  rich 
are  growing  richer  and  the  poor  poorer,  it  is  probably  true  that 
both  a  larger  quantity  and  a  larger  proportion  of  the  national 
income  are  in  the  hands  of  rich  and  well-to-do  business  men 
whose  means  have  been  advancing  faster  than  their  expenditure. 

1 '  So  ingrained  is  the  habit  of  accumulatibn  among  the  prosperous  classes  of 
modern  society,  that  it  seems  to  proceed  irrespective  of  the  rate  of  interest.'  Taus- 
sig,  Principles  of  Economics,  Vol.  II,  p.  27. 


HUMAN  COSTS  IN  THE  SUPPLY  OF  CAPITAL       101 

§  8.  So  much  for  the  automatic  saving  of  the  rich.  We  have 
next  to  take  into  account  the  admittedly  large  contribution  of 
the  classes  who  in  respect  of  income  are  'middle'.  This  com- 
prises the  great  majority  of  families  engaged  in  the  directive 
work  of  manufacture  and  commerce,  and  almost  the  whole  of  the 
upper  grades  of  the  professional  and  official  classes  in  such  a 
country  as  ours,  as  well  as  a  considerable  number  of  persons  of 
moderate  'independent'  means.  A  certain  amount  of  conscious 
'thrift'  is  traditional  in  these  classes.  It  is  by  no  means  auto- 
matic, but  involves  for  the  most  part  some  conscious  sacrifice  of 
current  satisfaction  in  favour  of  a  greater  estimated  future  sat- 
isfaction to  the  saver  or  his  family.  The  motives  which  influence 
such  saving,  alike  in  its  amount  and  its  application  as  capital, 
are  complex  and  various.  But  the  sacrifice  ascribed  to  such  sav- 
ing cannot  be  assumed  to  involve  any  economic  cost,  in  the  sense 
that  it  requires  the  payment  of  economic  interest  to  evoke  it. 
Still  less  can  it  be  assumed  to  involve  a  human  cost.  A  good  deal 
of  this  middle-class  saving,  though  less  automatic  than  the  sav- 
ings of  the  rich,  is  a  calculated  postponement  of  some  expendi- 
ture which  might  purchase  present  comforts  or  luxuries,  in  order 
to  make  provision  for  the  purchase  of  necessaries  or  conveniences 
at  some  future  time.  In  a  word,  it  is  of  the  nature  of  the  '  stock- 
ing' saving,  which  the  better-to-do  peasants  have  always  prac- 
tised before  the  opportunities  of  profitable  and  fairly  safe  in- 
vestment were  open  to  them.  Though  utilised  to  earn  interest, 
the  saving  would  be  made  just  the  same  if  no  objective  interest 
were  attainable,  provided  it  were  tolerably  secure  against  pillage 
or  destruction.  Risk  counts  for  more  than  interest  in  such  sav- 
ing, and  the  bulk  of  the  so-called  interest  which  such  savings  de- 
mand, as  a  condition  of  loan  or  investment,  is  not  true  interest 
but  insurance.  But  in  practice  inseparable  from  such  saving  is 
that  undertaken  with  the  direct  object  of  earning  interest  upon 
the  capital.  A  great  deal  of  middle-class  saving,  and  some  saving 
of  the  rich  class  would  not  take  place  without  the  hope  of  receiv- 
ing interest.  If  no  interest  were  attainable,  though  some  saving 
might  take  place,  in  order  to  provide  against  the  possibility  of 
a  total  collapse  of  current  earning  power  and  a  consequent  dep- 
rivation of  the  necessaries  of  life,  there  would  be  little  disposi- 


102  WORK  AND  WEALTH 

tion  to  give  up  any  present  free  expenditure  on  comforts  in  order 
to  provide  for  future  comforts  which  might  not  be  wanted,  or 
which,  in  consequence  of  loss  of  savings,  might  not  be  procurable. 
A  positive  bonus  in  the  shape  of  interest  seems  necessary  to  evoke 
this  latter  saving.  The  operation  of  this  bonus  as  an  inducement 
is,  however,  very  complex.  It  might  appear  at  first  sight  ob- 
vious that,  the  larger  the  bonus  in  the  shape  of  rate  of  interest, 
the  greater  the  aggregate  of  saving  it  would  evoke.  So  far  as 
non-automatic  saving  is  motived  by  a  general  desire  to  be  better 
off  in  the  future,  in  order  to  attain  a  standard  of  consumption 
and  of  social  consideration  which  denote  success  and  satisfy  per- 
sonal ambition,  or  in  order  to  bequeath  a  large  estate  to  one's 
family,  higher  interest  will  tend  to  evoke  a  corresponding  in- 
crease of  saving  in  those  whose  current  incomes  enable  them  to 
save  considerable  sums  without  encroaching  upon  their  estab- 
lished standard  of  comfort.  Young  or  middle-aged  men,  of  an  as- 
piring nature  and  with  rising  incomes,  will  undoubtedly  save  more 
if  they  see  a  handsome  return  on  their  investments.  But,  as  most 
men  will  realise  more  clearly  and  feel  more  keenly  these  future 
economic  and  social  gains  if  the  full  fruits  of  such  savings  will  be 
reaped  by  themselves,  not  by  their  heirs,  ageing  men  will  be 
likely  to  respond  less  freely  to  this  motive.  Present  comfort, 
security,  and  power,  will  mean  more  to  them  than  a  future  liber- 
ality of  living  which  they  can  only  hope  to  enjoy  for  a  few  years, 
if  at  all.  The  amount,  therefore,  of  the  acceleration  of  saving 
achieved  by  a  rise  of  interest  will  depend  a  good  deal  upon  the 
relative  importance  this  general  desire  to  be  better  off  possesses 
as  an  inducement  to  save.  That  relative  importance  again  will 
depend  a  good  deal  upon  whether  the  economic  and  social  con- 
ditions of  the  community  place  considerable  numbers  of  younger 
business  or  professional  men  in  a  position  of  rising  incomes  and 
of  considerable  saving  power,  or,  on  the  contrary,  confine  such 
surpluses  chiefly  to  older  men. 

If,  instead  of  taking  as  our  motive  a  general  desire  to  be  better 
off,  we  take  a  desire  to  save  in  order  to  make  some  limited 
specific  provision,  as  for  example  to  buy  an  annuity  of  £100,  the 
effect  of  a  higher  rate  of  interest  upon  volume  of  saving  is  likely 
to  be  different.  Though  it  may  serve  to  quicken  in  some  degree 


HUMAN  COSTS  IN  THE  SUPPLY  OF  CAPITAL       103 

the  pace  at  which  the  sum  required  will  be  amassed,  it  will  re- 
duce the  absolute  amount  of  saving.  For  when  interest  is  higher, 
the  capital  sum  required  to  yield  an  annuity  of  £100  a  year  will 
be  less  than  before.  Against  this,  however,  must  be  set  the  fact 
that,  when  a  definite  sum  is  needed  in  order  to  pay  off  some  debt, 
or  to  furnish  a  sufficiency  for  retirement,  a  high  rate  of  interest 
may  be  required  in  order  to  make  this  saving  possible  or  certain. 
If  a  man  cannot  save  enough  to  attain  such  definite  object,  he 
will  not  save  at  all,  for  an  insufficient  amount  will  be  held  futile; 
whereas,  if  a  rise  of  interest  gives  him  a  good  prospect  of  saving 
the  required  amount,  he  will  put  forth  the  effort. 

§  9.  But  making  due  allowance  for  counteracting  motives,  it 
is  tolerably  certain  that  a  rise  of  interest,  showing  any  signs 
of  continuance,  will  stimulate  an  increase  of  'motived'  saving, 
though  by  no  means  a  proportionate  increase.  Thus  it  will  ap- 
pear that,  so  far  as  this  large  section  of  middle-class  saving  is 
concerned,  some  definite  measurable  economic  costs,  in  the  sense 
of  deprivation  of  current  consumption,  are  involved,  requiring 
compensation  in  the  shape  of  interest.  But  the  question  which 
concerns  us  is  whether  there  are  human  costs  corresponding  to 
and  involved  in  these  economic  costs.  In  answering  this  ques- 
tion, it  is  not  enough  to  point  to  the  admitted  fact  that  this  sav- 
ing involves  the  failure  to  satisfy  some  current  desire  for  increased 
consumption.  It  has  to  be  considered  whether  the  sacrifice  of 
current  'satisfaction'  is  really  a  sacrifice  of  welfare,  either  from 
the  standpoint  of  the  saver,  or  of  the  society  of  which  he  is  a  mem- 
ber. For  we  have  not  taken  the  view  that  the  personal  transient 
desires  and  valuations  of  consumers  are  a  final  criterion,  either 
of  personal  or  social  welfare.  If  then  the  saving  evoked  by  pay- 
ing interest  merely  means  that  certain  fairly  well-to-do  folks  ab- 
stain from  comforts  or  luxuries,  which,  though  agreeable  and  inno- 
cent, carry  no  organic  benefit,  there  is  no  human  cost,  or  even 
if  there  is  some  slight  cost,  it  may  be  offset  by  the  individual  or 
social  benefit  resulting  from  the  postponement  of  consumption. 
A  large  proportion  of  motived  middle-class  saving  undoubtedly 
falls  within  this  category.  But  by  no  means  all.  A  good  deal 
of  lower  middle-class  saving  eats  into  certain  factors  of  humanly 
serviceable  expenditure,  particularly  expenditure  in  education 


io4  WORK  AND  WEALTH 

of  the  young.  Frequently  it  injures  the  free  life  of  the  home  by 
the  constant  pressure  of  niggling  economies,  which,  though  not 
perhaps  injurious  in  the  particular  privations  they  impose,  leave 
no  margin  for  the  small  pleasures  and  amenities  which  have 
a  vital  value.  Even  though  we  assume  that  such  saving  brings, 
in  the  ownership  of  property  and  the  interest  it  yields,  a  full 
vital  compensation  to  the  individual  who  saves,  it  by  no  means 
follows  that  it  is  socially  justified,  when  a  true  criterion  of  social 
welfare  is  applied.  Take  for  instance  the  saving  which  is  di- 
verted from  expenditure  on  education,  precluding  the  children 
from  getting  a  university  or  professional  training  and  turning 
them  on  the  world  to  earn  a  living,  less  effectively  equipped  than 
they  might  have  been.  Society  may  be  a  heavy  loser  by  its 
policy  of  evoking  such  thrift  by  means  of  interest,  for  it  obtains 
a  certain  amount  of  material  capital  in  place  of  the  more  valua- 
ble intellectual  or  moral  capital  which  the  money,  expended  upon 
education,  might  have  yielded.  Even  regarded  from  the  stand- 
point of  future  economic  productivity,  the  stimulation  of  this 
sort  of  saving  is  likely  to  be  injurious. 

§  10.  Far  graver  importance  attaches  to  this  consideration  when 
we  approach  the  savings  of  the  working-classes.  The  contribu- 
tion made  from  this  source  to  the  flow  of  fresh  capital,  the 
£300,000,000  per  annum,  is  evidently  attended  by  heavy  human 
costs.  Very  little  of  it  can  be  regarded  as  the  considered  reason- 
able outlay  over  a  long  period  of  time  of  income  not  needed  for 
current  organically  useful  consumption.  Most  of  it  involves  a 
stinting  of  the  prime  necessaries  or  conveniences  of  life,  or  of 
some  rise  in  present  expenditure  which  would  promote  the  health 
or  efficiency  of  the  family.  Almost  the  only  saving  made  by 
ordinary  wage-earners  not  attended  by  this  human  sacrifice  is 
that  applied  by  young  workers,  who  having  only  themselves  to 
keep,  can  afford  to  set  aside  some  portion  of  their  pay  in  full  em- 
ployment so  as  to  furnish  a  future  home,  and  to  insure  against 
a  few  special  emergencies  involving  loss  of  earning  power  or  ex- 
penses connected  with  death  or  sickness.  Even  such  personally 
serviceable  insurances  the  married  worker  can  seldom  properly 
afford.  Though  the  narrower  view  of  the  economy  of  a  self- 
sufficing  family  may  appear  to  justify  savings  made  out  of  a 


HUMAN  COSTS  IN  THE  SUPPLY  OF  CAPITAL      105 

wage  the  entire  present  expenditure  of  which  can  be  applied  to 
purposes  of  organically  useful  consumption,  the  wider  social 
standpoint  does  not  endorse  this  policy.  For  a  workman  to 
pinch  on  housing,  clothing,  the  education  of  his  children,  or  upon 
wholesome  recreation,  in  order  to  avoid  worse  pinching  in  some 
unforeseen  but  probable  emergency,  may  be  sound  individual 
economy.  But,  unless  society  is  unable  from  other  resources  at 
its  disposal  to  provide  against  these  emergencies  of  working- 
class  life,  it  is  an  unsound  social  economy,  involving  a  heavy  net 
cost  of  social  welfare.  The  issue  is  a  very  vital  one.  It  may  be 
stated  in  this  concrete  form.  Most  of  the  savings  effected  in  this 
country  out  of  a  family  income  of  3o/  or  less  per  week,  and  much 
of  the  savings  made  out  of  a  larger  income  when  the  worker's 
family  is  young,  involve  a  sort  of  abstinence  which  is  fraught 
with  heavy  net  costs  in  the  social  economy.  No  part  of  the 
economically  necessary  fund  of  annual  capital  ought  to  be  drawn 
from  this  sort  of  saving.  It  is  literally  a  coining  of  human  life 
into  instrumental  capital,  and  the  degradation  of  the  term 
'thrift'  in  its  application  to  such  saving  is  a  damning  commen- 
tary upon  the  false  standard  of  social  valuation  which  endorses 
and  approves  the  sacrifice.  The  great  risks  of  loss  which  actu- 
ally attend  such  saving,  and  the  heavy  expenses  of  the  machinery 
of  its  collection  and  administration,  aggravate  the  waste.  If  we 
ascribe  £50,000,000  l  out  of  the  £300,000,000  to  this  class  of 
savings,  a  proper  social  book-keeping  would  put  the  human  costs 
of  this  working-class  abstinence  as  a  large  offset  to  the  net  utility 
of  the  other  £250,000,000.  The  forethought,  endurance,  and  other 
real  or  supposed  benefits  to  the  character  of  the  workers  imputed 
to  this  '  thrift '  can  no  more  be  regarded  as  a  compensation  for  such 
social  injury,  than  can  the  discipline  and  fortitude  of  soldiers 
be  regarded  as  a  testimony  to  the  net  human  economy  of  war. 

1  This  is  most  likely  a  gravely  excessive  estimate.  Probably  £30,000,000  or 
YIO  of  the  national  saving  would  be  nearer  the  mark.  Moreover,  a  large  proportion 
of  working-class  savings  is  not  destined  to  purposes  of  permanent  investment  but 
to  provision  for  some  early  probable  emergency,  e.  g.  burial  or  unemployment  which 
will  cancel  the  saving.  There  exist  no  approximately  reliable  estimates  of  the 
amount  of  capital  belonging  to  the  working-classes.  The  usually  accepted  figure  in- 
cludes under  the  head  of  Post  Office  Savings  Bank  and  Building  Societies  a  large  but 
unknown  quantity  of  middle-class  savings. 


CHAPTER  IX 

HUMAN  UTILITY  OF  CONSUMPTION 

§  i.  When  we  turn  to  the  other  side  of  the  account,  the  human 
utility  which  this  £2,000,000,00x3  of  goods  and  services  repre- 
sents, we  enter  a  country  which,  as  we  have  already  recognised, 
Political  Economy  has  hardly  begun  to  explore.  For  though  the 
trend  of  a  large  modern  school  of  economists  has  been  to  find  in 
consumption  the  vis  matrix  of  all  economic  processes,  and  to 
bring  close  study  to  bear  upon  the  pressure  of  consumers'  wants 
as  they  operate  through  demand  in  the  markets  of  commodities, 
this  volte  face  in  the  theory  of  values  does  not  render  much  assist- 
ance to  our  human  valuation.  For  their  analysis  of  demands 
does  not  help  us  to  interpret  expenditure  in  terms  of  human  util- 
ity. As  an  instrument  for  such  a  purpose  it  is  doubly  defective. 
For,  in  the  first  place,  it  is  concerned  entirely  with  the  actual 
felt  wants  and  preferences  which  in  fact  determine  purchases. 
In  the  second  place,  it  takes  for  granted  the  existing  distribution 
of  incomes  or  consuming  power,  tracing  the  operation  of  this 
power  of  demand  upon  the  actual  economy  of  economic  processes. 
Now  these  limitations,  quite  necessary  for  the  purely  economic 
interpretation,  are  not  suited  to  our  requirements. 

The  current  standard  of  valuations  and  of  choice  cannot  be 
taken  as  an  adequate  standard  of  individual  or  social  welfare. 
Felt  wants,  and  demands  based  on  them,  form  no  doubt  some  in- 
dex of  welfare,  but  an  insufficient  one. 

A  considerable  proportion  of  the  goods  and  services  included 
in  the  real  income  which  we  are  analysing  must  from  our  stand- 
point be  classed  not  as  wealth,  but  as  'illth',  to  adopt  Ruskin's 
term.  What  proportion  we  should  place  in  the  category  will  of 
course  depend  upon  the  degree  to  which  we  hold  that  the  actual 
evolution  of  the  arts  of  consumption  has  been  distorted  from  its 
'natural'  course.  But  everyone  will  admit  that  many  sorts  of 
marketable  goods  and  services  are  injurious  alike  to  the  individ- 

106 


HUMAN  UTILITY  OF  CONSUMPTION  107 

uals  who  consume  them  and  to  society.  A  large  proportion  of  the 
stimulants  and  drugs  which  absorb  a  growing  share  of  income  in 
many  civilised  communities,  bad  literature,  art  and  recreations, 
the  services  of  prostitutes  and  flunkeys,  are  conspicuous  instances. 
Not  merely  does  no  human  utility  correspond  to  the  economic 
utility  ascribed  to  such  goods,  but  there  is  a  large  positive  dis- 
utility. The  aggregate  human  value  of  a  growing  national  in- 
come may  easily  be  reduced  by  any  increase  in  the  proportion 
of  expenditure  upon  such  classes  of  goods,  and  tendencies  of  dis- 
tribution which  lead  to  such  proportionate  increase  may  even  in- 
validate the  assumption  that  social  welfare  upon  the  whole  grows 
with  the  growth  of  the  national  dividend.  We  shall  presently  ' 
consider  some  of  the  factors  in  our  social  structure  which  bring 
about  the  development  of  definitely  bad  demands  and  bad  prod-^ 
ucts  to  satisfy  them. 

But  just  as  we  must  write  to  the  debit  side  of  our  human  ac- 
count a  great  many  articles  which  figure  on  the  credit  side  in 
ordinary  economic  book-keeping,  so  we  shall  be  compelled  to 
revise  the  comparative  values  attached  to  those  articles  which 
contain  actual  powers  of  human  utility.  A  valuation  which  sets 
an  equal  value  upon  each  part  of  a  supply  because  it  sells  for 
the  same  sum  cannot  serve  the  purposes  of  a  human  valuation. 
For  the  amount  of  human  utility,  individual  or  social,  attaching 
to  the  consumption  of  any  stock  of  goods  or  services,  must  evi- 
dently depend  in  large  degree  upon  who  gets  them  and  how  much 
each  consumer  gets,  that  is  to  say  upon  their  distribution. 

The  same  goods  figure  as  necessaries  of  life  or  as  waste  accord- 
ing to  who  gets  them.  Some  quarters  of  the  same  wheat  supply 
furnish  life  and  working  energy  to  labourers,  other  quarters  pass 
unconsumed  into  the  dustbins  of  the  rich. 

There  is,  moreover,  a  third  consideration  which  counts  in  the 
process  of  converting  economic  into  human  values.  As  in  the  dis- 
tribution of  productive  energy  human  economy  requires  an  ad- 
justment to  the  individual  capacity  of  production,  so  in  the  dis- 
tribution of  consumptive  utilities  a  corresponding  regard  must 
be  paid  to  the  natural  or  acquired  capacity  of  the  individual  con- 
sumer. Some  persons  have  greater  natural  capacity  than  others 
for  the  use  or  enjoyment  of  certain  classes  of  goods,  material  or 


io8  WORK  AND  WEALTH 

immaterial.  An  absolutely  equal  distribution  of  bread,  or  any 
other  necessity  of  life,  on  a  per  caput  basis,  would  evidently  be  a 
wasteful  economy.  What  applies  to  the  prime  physical  wants 
will  apply  more  largely  to  the  goods  which  supply  'higher'  wants. 
For,  as  one  ascends  from  the  purely  animal  to  the  spiritual  wants, 
the  divergences  in  capacity  of  utilisation  will  grow.  This  does 
not  necessarily  imply  very  wide  differences  in  the  aggregate 
quantity  of  wealth  which  can  be  usefully  consumed  by  different 
persons,  because  deficiencies  in  some  tastes  or  capacities  may  be 
compensated  by  development  of  others.  Moreover,  the  widest 
personal  differences  will  usually  lie  outside  the  range  of  economic 
satisfaction.  Yet  even  among  economic  consumers  there  will 
be  considerable  differences  in  the  amount  of  organic  service  or 
satisfaction  that  different  persons  can  get  out  of  the  same  amount 
of  goods.  A  noble  work  of  art,  as  Ruskin  insisted,  has  no  value 
for  primitive  peasants  without  cultivated  tastes.  The  finest 
library  of  serious  literature  has  little  value  to-day  in  an  ordinary 
English  industrial  town.  But  it  is  needless  to  multiply  examples 
to  illustrate  the  truth  that  the  vital  value  got  from  any  stock  of 
consumable  wealth  must  depend  upon  the  capacity  of  those  into 
whose  hands  it  passes  to  make  a  good  use  of  it.  In  other  words, 
it  depends  upon  how  far  the  consumer  has  acquired  the  art  of 
consumption.  Nor  is  this  merely  a  question  of  developing  and 
cultivating  sound  tastes  in  a  class  or  a  people.  It  is  often  a  mat- 
ter of  knowledge  how  to  extract  and  utilise  the  utility  which  goods 
contain.  It  is  sometimes  pointed  out  that  over  90  per  cent  of 
the  heating  power  of  coal  burned  in  domestic  fires  is  wasted. 
Improved  grates,  or  the  substitution  of  some  central  heating 
system,  might  stop  a  considerable  portion  of  this  waste,  securing 
an  increase  of  heating  power  and  of  its  vital  value  out  of  each 
ton  burned. 

§  2.  Until  we  know  then  'What  are  the  concrete  goods  repre- 
sented by  the  £2,000,000,000  income?  How  are  they  appor- 
tioned among  different  classes  of  the  consuming  public?  How 
far  are  those  who  get  these  goods  qualified  to  get  the  vital  value 
out  of  them?'  we  cannot  compute,  even  in  general  terms,  the 
aggregate  human  utility  they  carry. 

Our  calculus  of  the  human  utility  of  consumption  will  thus  in 


HUMAN  UTILITY  OF  CONSUMPTION  109 

form  and  method  closely  correspond  with  our  calculus  of  the 
human  cost  of  production.  Taking  as  the  subject-matter  of  our 
analysis  the  goods  and  services  constituting  the  real  income  of 
the  nation,  our  analysis  of  production  endeavoured  to  apply 
two  criteria,  one  relating  to  the  Arts  of  Production  actually  em- 
ployed, the  other  to  the  Distribution  of  the  productive  efforts 
involved  in  the  employment  of  these  arts.  Similarly,  our  analy- 
sis of  consumption  rests  upon  the  application  of  like  criteria 
to  the  Arts  of  Consumption  and  the  Distribution  of  consuming 
power. 

In  the  productive  analysis,  considerations  of  the  methods  of 
industry,  in  relation  to  the  quantity  of  creative  and  imitative, 
interesting  and  repellent  work,  the  use  of  machinery  and  sub- 
divided labour,  the  elements  of  forethought,  risk-taking,  and  or- 
ganisation, length  of  the  work-day,  regularity  of  employment, 
apportionment  of  routine  industry  among  the  grades  and  classes 
of  producers,  are  found  to  be  the  main  determinants  of  the  sum 
of  human  costs.  A  similar  analysis,  applied  to  the  consideration 
of  the  standards  and  methods  of  consumption  prevailing  among 
the  different  grades  and  classes  of  consumers,  and  to  the  distribu- 
tion of  consuming  power  among  these  classes  as  to  amount  and 
regularity,  will  yield  a  sum  of  human  utility. 

But  in  approaching  the  arts  of  consumption,  we  find  they  have 
not  developed  in  the  same  way  as  the  arts  of  production. 

Starting  from  primitive  society  with  the  practically  self- 
sufficing  family-group,  where  everybody  took  a  hand  in  the 
different  sorts  of  work  and  a  share  in  the  consumption  of  the 
different  products,  we  find  ourselves  carried  along  a  career  of  con- 
tinual differentiation  of  labour  not  attended  by  any  correspond- 
ing differentiation  of  consumption.  Industry  passes  into  large  co- 
operative forms  outside  the  single  family,  with  constantly  finer 
division  of  labour.  But  consumption  is  still  chiefly  carried  on 
within  the  limit  of  the  single  family,1  and,  so  far  from  being 
specialised,  it  becomes  more  generalised.  This  contrast  of  man 

1  Collective  or  cooperative  consumption  outside  the  home  or  family  is  of  course 
increasing.  Not  only  have  we  municipal  supplies  for  public  use,  e.  g.  schools,  libra- 
ries, museums,  parks,  baths,  lighting,  etc.,  but  many  forms  of  private  expenditure  of 
income  on  educational,  recreative,  philanthrophic  and  other  cooperative  modes  of 
consumption. 


no  WORK  AND  WEALTH 

as  producer  and  consumer  is  of  the  first  importance.  Modern 
industrial  evolution  shows  a  man  becoming  narrower  and  more 
specialised  on  his  producing  side,  wider  and  more  various  on  his 
consuming  side.  As  worker,  he  is  confined  to  the  constant  repeti- 
tion of  some  section  of  a  process  in  the  production  of  a  single 
class  of  article.  As  consumer,  he  is  in  direct  contact  with  thou- 
sands of  different  sorts  of  workers  in  all  parts  of  the  world,  and 
by  his  various  consumption  applies  a  direct  stimulus  which  vi- 
brates through  the  whole  industrial  system.  As  producer  he  is 
'the  one',  as  consumer  'the  many'. 

This  diverging  tendency  in  the  economic  evolution  of  man  has 
important  human  implications  which  will  concern  us  later.  At 
present  it  concerns  us  in  its  bearing  upon  the  arts  of  consumption. 

§  3.  The  great  complex  unit  of  productive  activities  which 
engaged  our  attention  was  the  Business.  Productive  economy, 
the  amount  of  human  cost  involved  in  the  production  of  a  given 
quantity  of  goods,  depended,  as  we  saw,  upon  the  structure  and 
working  of  this  Business.  What  is  the  consumptive  unit  that 
corresponds  to  the  Business?  It  is  the  Family,  or  Home,  re- 
garded on  its  economic  side.  There  is  an  economy  of  consump- 
tion in  the  family  standard  of  life  as  important  for  social  welfare 
as  the  economy  of  production  in  the  Business.  As  the  former 
stands  towards  costs  of  Production,  so  the  other  stands  towards 
utility  of  Consumption.  As  the  economy  of  Production  chiefly 
consists  in  minimising  cost,  so  the  economy  of  Consumption 
should  consist  in  maximising  utility.  But  the  standard  of  con- 
sumption has  in  modern  times  not  been  subjected  to  the  same 
forces  as  have  operated  upon  production.  Though  in  the  be- 
ginning, as  we  saw,  both  were  natural,  organic  and  related  proc- 
esses, the  modern  rationalisation  of  industry  has  not  been  ac- 
companied by  a  corresponding  rationalisation  of  consumption. 
Inventors  and  transformers  of  industry  have  not  had  their  coun- 
terpart in  consumption.  A  hundred  times  the  quantity  of 
thought  and  effort  has  gone  into  the  recent  evolution  of  a  single 
industry,  such  as  cotton  or  chemicals,  that  has  gone  into  the 
improvement  of  consumption.  It  is  not  difficult  to  understand 
the  reasons  of  the  great  conservatism  of  the  consumptive  arts. 
In  primitive  societies,  where  each  family  is  a  self-sufficing  eco- 


HUMAN  UTILITY  OF  CONSUMPTION  in 

nomic  unit,  or  where  division  of  labour  is  on  the  simplest  lines, 
the  industrial  arts  are  almost  as  conservative  as  the  methods  of 
consumption.  The  adoption  of  a  new  way  of  working  is  nearly 
as  difficult  as  the  adoption  of  a  new  want.  Custom  rules  both 
with  an  almost  equal  sway,  though  even  at  this  stage  its  hold 
upon  the  organic  feelings  will  be  somewhat  stronger  on  the  con- 
suming side,  especially  in  matters  of  food  and  of  family  or  tribal 
ritual.  It  will  be  a  little  easier  to  use  a  new  sort  of  snare,  or  to 
change  the  shape  of  a  pot  or  basket,  than  to  take  to  a  new  head- 
gear or  a  new  way  of  cooking  meat.  But  when  the  industrial 
arts  have  advanced  a  certain  way,  two  forces  combine  to  break 
the  bond  of  custom  and  to  encourage  experiments  and  improved 
methods.  While  consumption  continues  to  be  carried  on  in  a 
number  of  simple  actions  involving  no  considerable  effort  or 
conscious  attention,  industry  has  passed  into  a  related  series  of 
processes  of  considerable  duration  and  involving  many  separate 
acts  of  conscious  effort  and  attention.  The  production  of  an  ar- 
ticle will  thus  present  a  far  larger  number  of  opportunities  for 
change  than  its  consumption,  and  there  will  be  a  greater  likeli- 
hood that  advantageous  changes  will  be  tried  and  adopted.  A 
new  idea  of  saving  labour,  the  chance  discovery  of  some  new 
material,  will  be  approved  more  readily  than  any  suggestion  for 
some  new  food  or  an  unaccustomed  article  of  clothing.  For,  in 
the  former  case,  the  reasoning  faculty  is  of  necessity  alive  and 
operative  to  some  degree,  and  the  gain  of  the  change  can  be  real- 
ised experimentally,  while  in  the  latter  case,  the  reasoning  fac- 
ulty is  hardly  awake,  and  any  novelty  of  consumption  is  apt  to 
have  an  initial  barrier  of  natural  aversion  to  overcome. 

But  there  is  another  reason  for  the  easier  progress  of  the  pro- 
ductive costs.  In  proportion  as  work  passes  into  the  shape  of 
an  organised  business,  administered  by  an  employer  for  profit, 
the  control  of  any  of  its  processes  by  primitive  custom  or  taboo 
tends  to  disappear.  For  the  rationalism  involved  in  the  profit- 
able conduct  of  the  business  compels  the  employer  to  break  any 
traditional  barriers  obstructing  the  adoption  of  profitable  re- 
forms. Though  there  are  doubtless  many  reforms  of  the  con- 
sumptive arts  as  humanly  economical  and  profitable  as  any  of 
the  great  industrial  reforms,  there  is  not  the  same  concentrated 


ii2  WORK  AND  WEALTH 

motive  of  large  immediately  realised  gains  to  urge  their  claims 
on  any  body  of  consumers.  Not  only  are  the  gains  from  an  im- 
provement in  production  more  immediate,  more  concrete  and 
more  impressive,  but  the  risks  and  inconveniences  of  the  change 
are  largely  borne  by  others  than  the  reformer,  viz.  his  em- 
ployees, or  his  shareholders.  The  consumer,  on  the  other  hand, 
has  himself  to  bear  all  risks  and  inconveniences  involved  in  the 
abandonment  of  an  old  article  or  method  of  consumption,  or 
the  adoption  of  a  new  one.  Finally,  it  must  be  remembered 
that  the  actual  risks  attending  an  innovation  are  greater  for 
the  consumer.  For  the  modern  producer  is  a  skilled  specialist 
in  the  particular  art  of  production  in  which  he  is  engaged,  the 
consumer  is  an  unskilled  amateur  in  a  more  general  art,  possess- 
ing little  knowledge  and  no  effective  power  of  organising  for  his 
self-defence. 

§  4.  The  fact  that  the  monetary  profit  of  producers  is  the 
principal  determinant  of  most  changes  in  the  nature  of  con- 
sumables and  the  standards  of  consumption  is  one  of  the  most 
serious  sources  of  danger  in  the  evolution  of  a  healthy  social 
economy.  The  present  excessive  control  by  the  producer  injures 
and  distorts  the  art  of  consumption  in  three  ways.  i.  It  im- 
poses, maintains  and  fosters  definitely  injurious  forms  of  con- 
sumption, the  articles  of  'illth'.  2.  It  degrades  or  diminishes 
by  adulteration,  or  by  the  substitute  of  inferior  materials  or 
workmanship,  the  utility  of  many  articles  of  consumption  used 
to  satisfy  a  genuine  need.  3.  It  stimulates  the  satisfaction  of 
some  human  wants  and  depresses  the  satisfaction  of  others,  not 
according  to  their  true  utility,  but  according  to  the  more  or  less 
profitable  character  of  the  several  trades  which  supply  these 
wants. 

The  prevalence  of  many  of  the  most  costly  social  evils  of  our 
time,  war,  drink,  gambling,  prostitution,  overcrowding,  is 
largely  attributable  to  the  fact  that  their  material  or  trade  ap- 
pliances are  sources  of  great  private  profit.  Such  trades  are  the 
great  enemies  of  progress  in  the  art  of  life,  and  the  rescue  of  the 
consuming  public  from  their  grip  is  one  of  the  weightiest  prob- 
lems of  our  time.  Two  methods  of  defence  are  suggested.  One 
is  the  education  and  cooperation  of  consumers.  But  while  educa- 


HUMAN  UTILITY  OF  CONSUMPTION  113 

tion  may  do  much  to  check  the  consumption  of  certain  classes 
of  'illth',  it  can  hardly  enable  the  consumer  to  cope  with  the 
superior  skill  of  the  specialist  producer  by  defeating  the  arts  of 
adulteration  and  deterioration  which  are  so  profitable.  Con- 
sumers' Leagues  can  perhaps  do  something  to  check  adulteration 
and  sweating,  by  the  employment  of  skilled  agents.  But  it  will 
remain  very  difficult  for  any  such  private  action  to  defeat  the 
ever-changing  devices  of  the  less  scrupulous  firms  in  profitable 
trades.  The  recognition  of  these  defects  of  private  action  causes 
an  increased  demand  for  public  protection,  by  means  of  legisla- 
tive and  administrative  acts  of  prohibition  and  inspection.  The 
struggle  of  the  State  to  stamp  out  or  to  regulate  the  trades  which 
supply  injurious  or  adulterated  foods,  drinks,  and  drugs,  to  stop 
gambling,  prostitution,  insanitary  housing,  and  other  definitely 
vicious  businesses,  is  one  of  the  greatest  of  modern  social  ex- 
periments. Though  the  protection  of  the  consumer  is  in  many 
cases  joined  with  other  considerations  of  public  order,  it  is  the 
inherent  weakness  of  the  consumer,  when  confronted  by  the  re- 
sources of  an  organised  group  of  producers,  that  is  the  primary 
motive  of  this  State  policy.  How  far  the  State  protection  is, 
or  can  be  made  effective,  is  a  question  too  large  for  discussion 
here.  It  must  suffice  to  observe  that  the  conviction  that  the 
private  interests  of  producers  will  continue  to  defeat  all  at- 
tempts at  State  regulation  in  socially  'dangerous  trades'  fur- 
nishes to  socialism  an  argument  on  which  there  is  a  tendency  to 
lay  an  ever  greater  stress. 

§  5.  These  reflections  are  necessary  as  preliminary  to  the  con- 
sideration of  the  statics  and  dynamics  of  consumption  in  any 
nation  or  class.  For  they  represent  the  most  important  class  of 
disturbing  influences  in  the  evolution  of  standards  of  consump- 
tion. 

Now  in  considering  the  proper  mode  of  estimating  the  human 
utility  contained  in  our  £1,700,000,000  worth  of  'consumables', 
we  must  consider,  first,  the  validity  of  the  standards  of  consump- 
tion in  which  they  are  incorporated.  If  we  have  grounds  for 
believing  that  actual  standards  of  consumption  are  moulded  by 
the  free  pressure  of  healthy  organic  needs,  evolving  in  a  natural 
and  rational  order  towards  a  higher  human  life,  there  will  be  a 


ii4  WORK  AND  WEALTH 

presumption  favourable  to  the  attribution  of  a  high  measure  of 
human  utility  to  the  aggregate  income.  In  this  enquiry  we  may, 
therefore,  best  start  by  considering  the  evolution  of  wants  and 
modes  of  satisfying  them,  as  reactions  of  the  half-instinctive, 
half-rational  demands  of  man  upon  his  environment.  Human 
animals,  placed  in  a  given  environment  (with  some  power  of 
moving  into  another  slightly  different  one  or  of  altering  slightly 
that  in  which  they  are)  develop  standards  of  work  and  of  con- 
sumption along  the  lines  of  ' survival  value'.  The  earliest  stages 
in  the  evolution  of  both  standards,  consumption  and  industry, 
must  be  directed  by  the  conditions  of  the  physical  struggle  for 
life.  The  modern  historical  treatment  of  origins  applies  this 
principle  in  the  analysis  of  physical  environments,  in  which  Le 
Play  and  Buckle  have  done  such  valuable  pioneer  work,  and 
which  such  thinkers  as  Professor  Geddes  have  carried  further  in 
their  schemes  of  regional  survey. 

Though  the  fundamental  assumption  which  seems  to  under- 
lie this  method,  at  any  rate  in  its  fulness,  viz.  that  there  is  only 
one  sort  of  mankind  and  that  all  the  differences  which  emerge 
in  history,  whether  of  'racial'  character  or  of  institutions,  are 
products  of  environment,  is  open  to  question,1  the  dominant  part 
played  by  physical  environment  in  determining  the  evolution  of 
economic  wants  and  satisfactions,  is  not  disputed. 

Like  other  animals,  men  must  apply  themselves  to  obtain 
out  of  the  immediate  physical  environment  the  means  of  main- 
tenance— the  food,  shelter  and  weapons,  the  primitive  tools, 
which  enable  them  to  work  and  live  at  all.  If  we  consider  sep- 
arately the  consumptive  side  of  this  economy,  we  seem  to  grasp 
the  idea  of  an  evolution  of  a  standard  of  consumption,  moulded 
by  the  instinctive  selection  of  means  to  satisfy  organic  needs 
of  the  individual  and  the  species.  The  sorts  of  food  will  be  those 
obtained  by  experiments  upon  the  flora  and  fauna  of  the  country, 
guided  mainly  by  'instinct',  though  some  early  conscious  cun- 
ning of  selection  and  of  cultivation  will  serve  to  improve  and  in- 
crease the  supph'es.  The  clothing  will  consist  of  furs  or  plaited 
fibres  got  from  the  same  natural  supplies.  The  shelter  will  con- 

1  For  the  fullest  and  most  recent  exposition  of  this  theory  see  Mr.  J.  M.  Robert- 
son's The  Evolution  of  Slates  (Watts  &  Co.). 


HUMAN  UTILITY  OF  CONSUMPTION  115 

sist  of  an  easy  adaptation  of  trees,  caves  or  other  protective  pro- 
visions of  nature.  Even  the  early  tools,  weapons  and  domestic 
utensils,  though  admitting  some  more  rational  processes  of  se- 
lection and  adaptation,  will  remain  half-instinctive  efforts  to 
meet  strong  definite  needs.  So  long  as  we  are  within  this  narrow 
range  of  primary  animal  wants,  there  is  perhaps  little  scope  for 
grave  errors  and  wastes  in  standards  of  consumption.  Doubtless 
mistakes  of  omission  are  possible,  e.  g.  a  tribe  may  fail  to  utilise 
some  abundant  natural  supply  of  food  which  it  is  capable  of  as- 
similating. But  such  omissions  will  probably  be  rare,  at  any 
rate  in  cases  where  population  comes  to  press  upon  the  food 
supply,  so  evoking  experiments  in  all  natural  resources.  Grave 
errors  of  commission,  e.  g.  the  adoption  of  poisonous  ingredients 
into  the  supply  of  food  or  other  necessaries,  will  be  impossible, 
so  long  as  we  are  dealing  with  factors  of  consumption  which  have 
a  definite  survival  value.  This  seems  to  apply,  whether  we  at- 
tribute some  instinctive  wisdom  or  some  more  rational  process 
of  selection  as  the  evolutionary  motive.  In  either  case  we  have 
substantial  guarantees  for  the  organic  utility  of  most  articles 
which  enter  the  primitive  standard  of  consumption.  This  view 
is,  of  course,  quite  consistent  with  the  admission  that  in  the  de- 
tailed operation  of  this  economy  there  will  be  a  large  accumula- 
tion of  minor  errors  and  wastes.  The  most  accurate  instinct 
affords  no  security  against  such  losses:  indeed  the  very  strength 
of  an  animal  instinct  entails  an  inability  of  adaptation  to  ec- 
centricities or  irregularities  of  environment.  No  one  can  doubt 
this  who  watches  the  busy  bee  or  the  laborious  ant  pursuing  their 
respective  industries. 

§  6.  If  man  had  always  lived  either  in  a  stationary  or  a  very 
slowly  changing  environment,  he  would  have  remained  a  creature 
motived  almost  wholly  by  specific  instincts  along  a  fairly  ac- 
curate economy  of  prescribed  organic  needs.  The  substitution 
of  reason  for  a  large  part  of  these  specific  instincts  was  evoked 
by  the  necessity  of  adaptation  to  changes  and  chances  of  envi- 
ronment so  large,  swift  or  complex,  that  specific  instincts  were 
unfitted  to  cope  with  them.  Hence  the  need  for  a  general  'in- 
stinct' of  high  adaptive  capacity,  endowed  with  a  power  of  cen- 
tral control  operative  through  the  brain.  The  net  biological 


n6  WORK  AND  WEALTH 

economy  of  this  evolution  of  a  central  conscious  'control', 
in  order  to  secure  a  better  adjustment  between  organism  and 
environment,  carries  us  to  a  further  admission  regarding  the 
organic  value  of  the  basic  elements  in  a  standard  of  consump- 
tion. 

By  the  use  of  his  brain  man  not  merely  selects  from  an  indef- 
initely changing  environment  foods  and  other  articles  condu- 
cive to  survival,  but  adapts  the  changing  environment  to  his 
vital  purposes.  He  alters  the  physical  environment,  so  as  to 
make  it  yield  a  larger  quantity  and  variety  of  present  and  future 
goods,  and  he  combines  these  goods  into  harmonious  groups 
contributing  to  a  'standard'  of  consumption.  In  this  adaptive 
and  progressive  economy,  evolving  new  needs  and  new  modes  of 
satisfying  old  needs,  shall  we  expect  to  find  the  same  degree  of 
accuracy,  the  same  immunity  from  serious  error  as  in  the  nar- 
rower statical  economy  of  '  instinctive '  animalism? 

In  the  processes  of  adapting  external  nature  for  the  provision 
of  present,  still  more  of  future,  goods,  in  discovering  new  wants 
and  methods  of  satisfying  them,  and  in  assimilating  the  new 
wants  in  a  standard  of  consumption,  there  will  necessarily  be 
larger  scope  for  error.  But  so  long  as  the  inventive  and  pro- 
gressive mind  of  man  confines  the  changes,  alike  of  industry  and 
of  consumption,  to  the  sphere  of  simple  material  commodities 
having  a  close  and  important  bearing  upon  physical  survival, 
the  limits  of  error  and  of  waste  must  continue  to  be  narrow.  All 
such  progress  will  require  experimentation,  and  experiment  im- 
plies a  possibility  of  error.  But  at  this  early  stage  in  the  evolu- 
tion of  wants,  any  want,  or  any  mode  of  supplying  a  want,  which 
is  definitely  bad,  will  be  curbed  or  stamped  out  by  the  conditions 
of  the  struggle  for  life.  A  tribe  that  tries  hastily  to  incorporate 
a  tasty  poison  in  its  diet  must  very  soon  succumb,  as  many 
modern  instances  of  races  exposed  to  the  attraction  of  'fire- 
water' testify.  Thus  far  it  may  be  admitted  that  organic  utility 
will  assert  its  supremacy  as  a  regulative  force,  not  only  in  the 
rejection  of  the  bad,  but  in  the  selection  of  the  good.  The  low 
standard  of  consumption  of  a  prosperous  caveman  or  of  a  primi- 
tive pastoral  family  must  conform  to  an  economy  of  high  utility. 
Not  only  would  all  his  ingredients  of  food,  clothes,  shelter,  firing 


HUMAN  UTILITY  OF  CONSUMPTION  nj 

and  utensils,  be  closely  conducive  to  physical  survival,  but  they 
would  be  closely  complementary  to  one  another.  This  comple- 
mentary structure  of  the  standard  of  consumption  follows  from 
the  organic  nature  of  man.  Unless  all  his  organic  needs  are  con- 
tinuously met  he  perishes.  While,  therefore,  he  may  know 
nothing  of  the  distinctions  which  science  later  will  discover  in 
the  necessary  constituents  of  food,  he  must  have  worked  out  em- 
pirically a  diet  which  will  give  him  some  sufficiently  correct  com- 
bination of  proteids,  carbohydrates  and  fats,  and  in  the  forms  hi 
which  he  can  assimilate  them.  So  also  with  his  clothes,  if  he 
wears  them.  No  savage  could  possibly  adopt,  for  ordinary  wear, 
costumes  so  wasteful  and  so  inconvenient  as  flourish  in  civilised 
societies.  Similarly  with  housing  and  utensils.  And  not  only 
must  the  articles  belonging  to  each  group  of  wants  be  comple- 
mentary, but  the  groups  will  themselves  be  complementary. 
The  firing  will  have  relation  to  the  times  and  sorts  of  feeding: 
clothing  and  shelter  will  be  allied  in  the  protection  they  afford 
against  weather  and  enemies:  tools  and  weapons  will  be  even 
more  closely  related. 

Thus  in  the  earlier  evolution  of  wants,  when  changes,  alike 
of  ways  of  living  and  ways  of  work,  are  few  and  slow  and  have 
a  close  bearing  on  survival,  a  standard  of  consumption  will  have 
a  very  high  organic  value. 

§  7.  But  when  man  passes  into  a  more  progressive  era,  and  a 
definite  and  fairly  rapid  process  of  civilisation  begins,  the  brain 
continually  devising  new  wants  and  satisfactions,  we  seem  to 
lose  the  earlier  guarantees  of  organic  utility.  When  the  stand- 
ard of  consumption  incorporates  increasing  elements,  not  of 
necessaries  but  of  material  conveniences,  comforts  and  luxuries, 
and  adds  to  the  satisfaction  of  physical  desires  that  of  psychical 
desires,  how  far  may  it  not  trespass  outside  the  true  economy  of 
welfare?  So  long  as  the  requirements  of  physical  survival  dom- 
inate the  standard,  it  matters  little  whether  animal  instinct  or 
some  more  rational  procedure  maintains  the  standard.  But  when 
these  requirements  lose  control,  and  a  standard  of  civilised  hu- 
man life  contains  ever  larger  and  more  numerous  elements  which 
carry  little  or  no  'survival  value',  the  possibilities  of  error  and  of 
disutility  appear  to  multiply. 


ii8  WORK  AND  WEALTH 

If  civilisation,  with  its  novel  modes  of  living,  be  regarded  as 
an  essentially  artificial  process,  in  which  considerations  of  or- 
ganic welfare  exercise  no  regulative  influence,  there  seems  no 
limit  to  the  amount  of  disutility  or  illfare  which  may  attach 
to  the  consumption  of  our  national  income.  This  appears,  in- 
deed, to  be  the  view  of  some  of  our  social  critics.  Even  those 
who  do  not  go  so  far  as  Mr.  Edward  Carpenter  in  diagnosing 
civilisation  as  a  disease,  yet  assign  to  it  a  very  wide  departure 
from  the  true  path  of  human  progress.  Indeed,  it  would  be  idle 
to  deny  that  this  income,  not  only  in  the  terms  of  its  distribution 
but  also  in  its  consumption,  contains  very  large  factors  of  waste 
and  disutility,  and  that  the  higher,  later  elements  carry  larger 
possibilities  of  waste  than  the  earlier. 

But  this  admission  must  not  lead  us  to  conceive  of  the  so- 
called  'artificial'  factors  in  a  standard  of  consumption  as  the 
products,  either  of  chance,  or  of  some  normal  perversity  in  the 
development  of  tastes  which  foists  upon  consumption  elements 
destitute  of  human  value. 

For  there  are  two  possibilities  to  bear  in  mind.  The  first  is 
that  even  in  the  higher,  less  material,  more  'artificial'  ingre- 
dients of  consumption,  the  test  of  'survival  value'  may  still  in 
some  measure  apply.  A  too  comfortable  or  luxurious  mode  of 
life  may  impair  vitality,  lessen  the  desire  or  capacity  of  parent- 
hood, or  may  introduce  some  inheritable  defect  injurious  to  the 
stock.  Such  results  may  follow,  not  merely  from  bad  physical 
habits,  but  from  what  are  commonly  accounted  good  intellectual 
habits.  For  it  is  believed  that  the  high  cerebration  of  an  intel- 
lectual life  is  inimical  to  human  fertility.  Again,  so  far  as  sexual 
attractions  determine  marriage  and  parenthood,  modes  of  living 
which  either  impair  or  overlay  the  points  of  attraction  will  con- 
tinue to  be  eliminated  by  natural  selection.  Habits  of  living, 
which  damage  either  manliness  or  womanliness  will  thus  continue 
to  be  curbed  by  Nature. 

But  Nature  may  possess  another  safeguard  of  a  more  general 
efficacy.  For  any  intelligible  theory  of  evolution,  either  of  an 
individual  organism  or  a  species,  involves  the  presence  and  opera- 
tion of  some  central  power  which,  working  either  through  par- 
ticular instincts,  as  in  lower  animals,  or  largely  through  a  co- 


HUMAN  UTILITY  OF  CONSUMPTION  119 

ordinating  'reason',  as  in  man,  not  only  conserves  but  develops. 
This  organic  purpose,  or  directive  power,  cannot  be  regarded  as 
confined  to  mere  physical  survival,  either  of  the  individual  or 
the  species.  It  must  also  be  considered  as  aiming  at  develop- 
ment, a  fuller  life  for  individual  and  species.  Now  the  evolution 
of  human  wants  and  standards  of  consumption  must  be  regarded 
as  an  aspect  of  this  wider  process  of  development.  Whatever 
measure,  then,  of  control  be  accorded  to  the  central  directive 
power  in  organic  development,  must  operate  to  determine  eco- 
nomic wants  and  economic  standards  of  life.  If  such  directive 
action  were  infallible,  securing,  through  the  central  cerebral  con- 
trol, a  completely  economical  policy  of  conservation  and  develop- 
ment, no  problems  of  a  distinctively  social  or  moral  character 
would  arise.  The  existence  of  error,  waste,  sin,  attests  the  falli- 
bility of  this  directive  power.  Aiming  to  keep  the  individual 
and  the  species  to  lines  of  conduct  that  are  psycho-physically 
beneficial,  its  directions  are  either  falsified  or  set  aside  by  the 
force  of  some  particular  impulse  or  emotion,  usurping  or  defying 
the  central  authority.  The  liability  to  such  error  and  waste  ap- 
pears to  grow  pari  passu  with  organic  development.  As  reason- 
ing man  with  his  more  complex  life  has  more  chances  of  going 
wrong  than  lower  animals  guided  by  instincts  along  a  narrow 
life,  so  with  each  advance  in  the  complexity  of  human  life  these 
chances  of  error  multiply.  The  explanation  of  this  expanding 
scope  for  error  is  not  that  reason  is  an  inferior  instrument  to 
instinct.  Even  in  matters  of  'life  and  death',  with  which  animal 
nature  is  primarily  concerned,  reason  must  be  accounted  in  the 
main  an  improvement  upon  instinct.  For  though  a  particular 
instinct  works  more  easily  and  accurately  in  an  absolutely  uni- 
form environment,  reason  deals  more  successfully  with  eccen- 
tricities and  changes.  Its  essential  quality  is  this  superior  adap- 
tiveness.  Therefore,  in  handling  an  environment,  which  not  only 
is  various  and  ever  changing  by  its  own  nature,  but  is  made  more 
various  and  more  changing  by  the  interference  of  man,  the  human 
reason  must  work  more  successfully  even  for  purposes  of  physical 
survival  than  any  array  of  instincts  could.  In  the  struggle  for 
a  sufficient  regular  supply  of  food,  or  in  the  war  against  microbes, 
the  rationalism  of  modern  science  and  industry  performs  'sur- 


120  WORK  AND  WEALTH 

vival '  work  for  which  the  exactitude  of  animal  instinct  is  essen- 
tially unfitted. 

The  view  then  that  error  and  waste  necessarily  increase  with 
the  development  of  human  society  is  not  based  upon  any  in- 
feriority of  reason  to  instinct.  It  is  due  to  the  fact  that,  as  hu- 
manity evolves  further,  a  smaller  proportion  of  its  total  energy 
is  needed  for  mere  survival,  and  a  larger  proportion  is  free  for 
purposes  of  specific  and  individual  progress.  Now,  the  natural 
economy  for  survival,  whether  working  by  instinct  or  by  reason, 
is  far  more  rigorously  enforced  than  the  economy  for  progress. 
So  long  as  the  arts  of  industry  are  so  crude  as  to  absorb  almost 
all  the  available  work  of  man  in  provision  for  survival,  the  scope 
for  waste  is  rigorously  circumscribed.  But  as  industry  develops 
to  a  stage  that  yields  a  considerable  'surplus'  beyond  the  needs 
for  mere  survival,  the  possibility  of  waste  increases.  For,  then, 
it  becomes  possible  for  individuals,  or  groups  within  a  community, 
to  divert  to  purposes  of  excessive  personal  enjoyment  the  surplus 
of  productive  power  which,  'economically'  directed  by  Nature 
or  Reason,  would  have  served  to  raise  the  general  level  of  well- 
being. 

The  widest  aspect  of  this  phenomenon  does  not  concern  us 
here.  It  will  be  the  subject  of  later  commentary.  We  are  here 
concerned  only  to  explain  why  it  is  likely  that,  as  wealth  grows, 
waste  also  will  grow,  and  why  the  higher  standards  of  comfort 
in  a  nation  or  a  class  will  contain  a  larger  proportion  of  socially 
wasteful  or  injurious  goods.  Nature's  guarantee  of  the  sound 
organic  use  of  the  basic  constituents  of  a  standard  of  consump- 
tion  does  not  extend  with  the  same  force  to  the  conveniences, 
comforts  and  luxuries  built  upon  this  basis.  Though  one  need 
not  assume  that  no  organically  sound  instinct  of  selection  or 
rejection  operates  in  the  adoption  of  new  comforts  or  luxuries, 
that  natural  safeguard  must  certainly  be  accounted  weaker  and 
less  reliable.  As  we  study  presently  the  actual  modes  by  which 
the  higher  ingredients  are  adopted  into  a  class  standard,  we  shall 
see  that  this  assumption  is  borne  out  by  experience,  and  that 
considerations  of  organic  welfare  play  a  rapidly  diminishing  part 
in  determining  the  spread  of  most  of  the  higher  forms  of  material 
and  intellectual  consumption. 


CHAPTER  X 

CLASS  STANDARDS   OF  CONSUMPTION 

§  i.  We  may  now  apply  these  general  considerations  regarding 
the  evolution  of  wants  to  class  and  individual  standards  of  con- 
sumption. In  a  concrete  class  standard  of  consumption  we  may 
conveniently  distinguish  three  determinant  factors:  ist.  The  pri- 
mary organic  factor,  the  elements  in  consumption  imposed  by 
general  or  particular  conditions  of  physical  environment,  such 
as  soil,  climate,  in  relation  to  physical  needs.  2nd.  The  indus- 
trial factor,  the  modifications  in  organic  needs  due  directly  or 
indirectly  to  conditions  of  work.  3rd.  The  conventional  factor, 
those  elements  in  a  standard  of  consumption  not  based  directly 
upon  considerations  of  physical  or  economic  environment  but 
imposed  by  social  custom. 

So  far  as  the  first  factor  is  concerned,  we  are  for  the  most 
part  in  the  region  of  material  necessaries  in  which,  as  we  have 
already  seen,  the  organic  securities  for  human  utility  are  strong- 
est. Where  any  population  has  for  many  generations  been  set- 
tled in  a  locality,  it  must  adapt  itself  in  two  ways  to  the  physical 
conditions  of  that  locality.  Its  chief  constituents  of  food,  cloth- 
ing, shelter,  etc.  must  be  accommodated  to  all  the  more  perma- 
nent and  important  conditions  of  soil,  climate,  situation  and  of 
the  flora  and  fauna  of  the  country.  A  tropical  people  cannot  be 
great  meat-eaters  or  addicted  to  strong  drinks,  though  the  ma- 
terials for  both  habits  may  be  abundant.  An  arctic  people,  on 
the  other  hand,  must  find  in  animal  fats  a  principal  food,  and  in 
the  skins  of  animals  a  principal  article  of  clothing.  In  a  country 
where  earthquakes  frequently  occur,  the  materials  and  structure 
of  the  houses  must  be  light.  In  the  same  country  the  people  of 
the  mountains,  the  valleys,  the  plains,  the  sea-shores,  will  be 
found  with  necessary  differences  in  their  fundamental  standard 
of  consumption.  It  is,  indeed,  self-evident  that  physical  envi- 
ronment must  exercise  an  important  selective  and  rejective 

121 


122  WORK  AND  WEALTH 

power  represented  in  the  material  standard  of  consumption. 
So  far  as  man  can  modify  and  alter  the  physical  environment, 
as  by  drainage,  forestry,  or  the  destruction  of  noxious  animals 
or  bacteria,  he  may  to  that  extent  release  his  standard  of  con- 
sumption for  this  regional  control. 

Primitive  man,  again,  and  even  most  men  in  comparatively 
advanced  civilisations,  are  confined  for  the  chief  materials  of 
food,  shelter  and  other  necessaries,  to  the  resources  of  their  coun- 
try or  locality.  They  must  accommodate  their  digestions  and 
their  tastes  to  the  foods  that  can  be  raised  conveniently  and  in 
sufficient  quantities  in  the  neighbourhood :  they  must  build  their 
houses  and  make  their  domestic  and  other  utensils  out  of  the 
material  products  within  easy  reach.  The  early  evolution  of  a 
standard  of  necessary  consumption,  working  under  this  close 
economy  of  trial  and  error,  appears  to  guarantee  a  free,  natural, 
instinctive  selection  of  organically  sound  consumables. 

The  primary  physical  characteristics  of  a  country,  also  of 
course,  affect  with  varying  degrees  of  urgency  those  elements  in 
a  standard  of  consumption  not  directly  endowed  with  strong 
survival  value,  those  which  we  call  conveniences,  comforts, 
luxuries.  The  modes  and  materials  of  bodily  adornment,  the 
styles  of  domestic  and  other  architecture,  religious  ceremonies, 
forms  of  recreation,  will  evidently  be  determined  in  a  direct  man- 
ner by  climatic  and  other  physical  considerations. 

Recent  civilisation,  with  its  rapid  extensive  spread  of  com- 
munications, and  its  equally  rapid  and  various  expansion  of  the 
arts  of  industry,  has  brought  about  an  interference  with  this 
natural  economy  which  has  dangers  as  well  as  advantages.  The 
swift  expansion  of  commerce  brings  great  quantities  of  foods 
and  other  consumables  from  remote  countries,  and  places  them 
at  the  disposal  of  populations  under  conditions  which  give  no 
adequate  security  for  organic  utility  of  consumption.  Under 
an  economy  of  natural  selection  exotics  are  by  right  suspect, 
at  any  rate  until  time  has  tried  them.  The  incorporation  of 
articles  such  as  tea  and  tobacco  in  our  popular  consumption  has 
taken  place  under  conditions  which  afford  no  proper  guarantee 
of  their  individual  utility,  or  against  the  bad  reactions  they  may 
cause  in  the  whole  complex  standards  of  consumption. 


CLASS  STANDARDS  OF  CONSUMPTION  123 

The  back  stroke  of  this  commercial  expansion  is  seen  in  such 
occurrences  as  the  deforestation  of  great  tracts  of  country  and 
the  alteration  of  the  climatic  character,  with  its  effects  upon  the 
lives  of  the  inhabitants. 

But  though  certain  errors  and  wastes  attend  these  processes 
of  commercialism  and  industrialism,  they  must  not  be  exagger- 
ated. There  is  no  reason  to  hold  that  mankind  in  general  has 
been  so  deeply  and  firmly  specialised  in  needs  and  satisfactions 
by  local  physical  conditions  that  he  cannot  advantageously 
avail  himself  of  the  material  products  of  a  wider  environment. 
Though  the  digestive  and  assimilative  apparatus  may  not  be 
so  adaptable  as  the  brain,  there  is  no  ground  for  holding  that 
conformity  during  many  generations  to  a  particular  form  of 
diet  precludes  the  easy  adoption  of  exotic  elements  often  con- 
taining better  food-properties  in  more  assimilable  forms.  A 
Chinese  population,  habituated  to  rice,  can  quickly  respond  in 
higher  physical  efficiency  to  a  wheat  diet,  nor  is  the  fact  that 
bananas  are  a  tropical  fruit  detrimental  to  their  value  as  food  for 
Londoners. 

How  far  the  purely  empirical  way  in  which  foods  and  other 
elements  in  a  necessary  standard  have  been  evolved  can  be  ad- 
vantageously corrected  or  supplemented  by  scientific  tests,  is  a 
question  remaining  for  discussion  after  the  other  factors  in 
standards  of  consumption  have  been  brought  under  inspection. 

§  2.  Industrial  conditions,  themselves  of  course  largely  de- 
termined by  physical  environment,  affect  class  and  individual 
consumption  in  very  obvious  ways.  Each  occupation  imposes 
on  the  worker,  and  indirectly  upon  all  the  members  of  his  family, 
certain  methods  of  living.  Physiological  laws  prescribe  many 
of  those  methods.  A  particular  sort  of  output  of  muscular  or 
nervous  energy  demands  a  particular  sort  of  diet  to  replace  the 
expenditure.  The  proper  diet  of  an  agricultural  labourer,  a  mill 
operative  and  a  miner,  will  have  certain  recognised  differences. 
Muscular  and  mental,  active  and  sedentary,  monotonous  and 
interesting  work,  will  involve  different  amounts  and  sorts  of 
nourishment,  and  different  expenditures  for  leisure  occupations. 
These  differences  will  extend  both  to  the  necessaries  and  the 
higher  elements  in  standards  of  consumption.  Industrial  re- 


i24  WORK  AND  WEALTH 

quirements  will  stamp  themselves  with  more  or  less  force  and 
exactitude  upon  each  occupation.  An  analysis  of  budgets  would 
show  that  the  standard  of  the  clergyman  was  not  that  of  the 
merchant  or  even  of  the  doctor,  and  that  the  same  family  income 
would  be  differently  applied.  The  stockbroker  will  not  live  like 
the  mill-owner,  nor  the  journalist  like  the  shopkeeper.  So  right 
through  the  various  grades  of  workers.  The  skilled  mechanic, 
the  factory  hand,  the  railway  man,  the  clerk,  the  shop-assistant, 
the  labourer,  will  all  have  their  respective  standards,  moulded 
or  modified  by  the  conditions  of  their  work :  their  needs  and  tastes 
for  food,  clothing,  recreation,  etc.,  will  be  affected  in  subtle  ways 
by  that  work. 

'Productive'  consumption  is  the  term  given  by  classical  po- 
litical economy  to  that  portion  of  consumption  applied  so  as  to 
maintain  or  improve  the  efficiency  of  labour-power  in  the  worker 
and  his  family.  Necessaries  alone  were  held  absolutely  produc- 
tive, conveniences  and  comforts  were  dubious,  luxuries  were 
unproductive.  Regarded  even  from  the  commercial  standpoint, 
it  was  a  shallow  analysis,  confined  to  a  present  utilisation  of 
immediately  useful  commodities,  and  ignoring  the  reactions  upon 
future  productivity  of  a  rise  in  education  and  refinement.  It 
belonged  to  an  age  before  the  economy  of  high  wages  or  the 
moral  stimuli  of  hope  and  an  intelligent  outlook  upon  life  had 
won  any  considerable  recognition  as  'productive'  stimuli. 

But  from  the  standpoint  of  our  analysis  the  defect  of  this 
treatment  is  a  deeper  one.  For  us  the  distinction  between  pro- 
ductive and  unproductive  consumption  is  as  fundamental  as  in 
the  older  economic  theory.  The  difference  lies  in  the  concep- 
tion of  the  'product'  that  is  to  give  a  meaning  to  'productive'. 
Productive  consumption,  according  to  the  older  economic  theory, 
was  measured  by  the  yield  of  economic  productivity,  according 
to  our  theory  by  the  yield  of  vital  welfare.  The  two  not  merely 
are  not  identical,  they  may  often  be  conflicting  values. 

A  diet  productive  of  great  muscular  energy  for  a  navvy, 
foundryman  or  drayman,  may  produce  a  coarse  type  of  animal- 
ism which  precludes  the  formation  of  a  higher  nervous  structure 
and  the  finer  qualities  of  character  that  are  its  spiritual  counter- 
part.  The  industrial  conditions  of  many  productive  employ- 


CLASS  STANDARDS  OF  CONSUMPTION  125 

ments  are  notoriously  such  as  to  impair  the  physique  and  the 
muscle  of  the  workers  engaged  in  them,  and  there  is  no  ground 
for  assuming  that  the  habits  of  consumption,  conducing  to  in- 
creased productivity  in  such  trades,  carry  any  net  freight  of 
human  utility. 

Nor  is  it  only  in  manual  labour  that  the  industrial  influences 
moulding  a  standard  of  consumption  may  damage  its  human 
quality.  Much  sedentary  intellectual  work  involves  similarly 
injurious  reactions  upon  modes  of  living.  The  physical  abuses 
of  athleticism,  stimulants  and  drugs,  are  very  prevalent  results 
of  disordered  competition  in  intellectual  employments.  But, 
as  bad  elements  in  standards  of  expenditure,  the  intellectual  ex- 
cesses, the  fatuous  or  degrading  forms  of  literature,  drama,  art, 
music,  which  this  life  generates,  are  perhaps  even  more  injurious. 
One  of  the  heaviest  human  costs  of  an  over-intellectual  life  to- 
day is  its  'culture'. 

§3.  When  we  come  to  'conventional'  elements  in  standards 
of  comfort,  we  enter  a  region  which  appears  to  admit  an  indefi- 
nite amount  of  waste  and  error. 

The  very  term  'conventional',  set  as  it  is  in  opposition  to 
'natural',  indeed,  suggests  an  absence  of  organic  utility.  We 
hear  of  'conventional  necessaries'  even  in  the  lowest  levels  of 
working-class  expenditure.  I  presume  that  the  expenditure  in 
beer,  tobacco,  upon  sprees  or  funerals,  or  upon  decorative  cloth- 
ing, would  be  placed  in  this  category. 

From  the  purely  economic  standpoint  such  expenditure  has 
been  accounted  either  waste,  or,  even  worse,  'disutility'. 

It  is  often  argued  that  a  labouring  family  on  2is.  per  week 
could  be  kept  in  physical  efficiency,  if  every  penny  were  expended 
economically  in  obtaining  'organic  value'.  This  is  the  ideal  of  a 
certain  order  of  advocates  of  thrift  and  temperance.  Whole  genera- 
tions of  economists  have  accumulated  easy  virtue  by  preaching 
this  rigorous  economy  for  the  working-classes.  It  has  always 
seemed  possible  to  squeeze  out  of  the  standard  of  any  working- 
class  enough  of  the  conventional  or  superfluous  to  justify  the 
opinion  that  most  of  the  misery  of  the  poor  is  their  own  fault, 
in  the  sense  that,  if  they  made  a  completely  rational  use  of  their 
wages,  they  could  support  themselves  in  decency.  The  amount 


126  WORK  AND  WEALTH 

spent  by  the  workers  on  drink  alone  would,  it  is  often  contended, 
make  ample  provision  against  most  of  the  worst  emergencies  of 
working-class  life. 

Now  there  are  several  comments  to  be  made  on  this  attitude 
towards  conventional  expenditure,  i.  As  one  ascends  above  the 
primary  organic  needs,  the  evolution  of  desires  becomes  less  re- 
liable and  more  complicated:  the  element  of  will  and  choice  and 
therefore  of  choosing  badly,  becomes  larger.  Some  condiments 
are  useful  for  assisting  the  digestion  of  primary  foods,  but  it  is 
easier  to  make  mistakes  in  condiments  than  in  staple  foods.  So 
with  all  the  higher  and  more  complex  wants.  As  one  rises  above 
the  prime  requisites  and  conveniences,  organic  instincts,  or 
tastes  directly  dependent  on  them,  play  a  diminishing  part  as 
faithful  directors  of  consumption.  This  natural  guidance  does 
not  indeed  disappear.  The  evolution  of  a  human  being  with 
finer  nervous  structure,  and  with  higher  intellectual  and  moral 
needs  and  desires  related  to  that  structure,  is  a  fairly  continuous 
process.  The  finest  and  best-balanced  natures  thus  carry  into 
their  more  complex  modes  of  satisfaction  a  true  psycho-physical 
standard  of  utility.  But  it  is  already  admitted  that  the  liability 
to  go  wrong  is  far  greater  in  those  modes  of  expenditure  which 
are  not  directly  contributory  to  survival.  This  is  the  case, 
whether  individual  tastes  or  some  accepted  convention  determines 
the  expenditure. 

This  is  so  generally  recognised  that  it  is  likely  that  the  or- 
ganic utility  of  personal  tastes  on  the  one  hand,  custom  and  con- 
vention on  the  other,  has  been  unduly  disparaged.  The  temper 
of  economists  in  assessing  values  has  been  too  short-sighted  and 
too  inelastic.  A  good  deal  of  personal  expenditure  that  is  waste- 
ful or  worse  when  taken  on  its  separate  merits  may  be  justified 
as  a  rude  experimental  process  by  which  a  person  learns  wisdom 
and  finds  his  soul.  What  is  true  of  certain  freakish  personal  con- 
duct is  probably  true  also  of  those  conventional  practices,  in 
which  whole  societies  or  classes  conduct  their  collective  experi- 
ments in  the  art  of  living. 

A  too  rigorous  economy,  whether  directed  by  instinct  or  reason, 
which  should  rule  with  minute  exactitude  the  expenditure  of 
individuals  or  societies,  in  order  to  extract  from  all  expenditure 


CLASS  STANDARDS  OF  CONSUMPTION  127 

of  income  the  maximum  of  seen  utilities,  would  be  bound  to  sin 
against  that  law  of  progress  which  demands  an  adequate  provi- 
sion for  these  experimental  processes  in  lif e  which,  taken  by  them- 
selves, appear  so  wasteful. 

Social  psychology  brings  a  more  liberal  and  sympathetic  under- 
standing to  bear  upon  some  of  the  practices  which  to  a  short- 
sighted economist  appear  mere  wasteful  extravagance,  destitute 
of  utility  and  displacing  some  immediately  serviceable  consump- 
tion. Let  me  take  some  notable  examples  from  current  working- 
class  expenditure.  The  lavish  expenditure  upon  bank-holidays, 
in  which  large  classes  of  wage-earners  'blow'  a  large  proportion 
of  any  surplus  they  possess  beyond  the  subsistence  wage,  is  the 
subject  of  caustic  criticism  by  thrifty  middle-class  folk.  But 
may  not  this  holiday  spirit,  with  a  certain  abandon  it  contains,  be 
regarded  as  a  'natural'  and  even  wholesome  reaction  against  the 
cramping  pressure  of  routine  industrialism  and  the  normal  rigour 
of  a  close  domestic  economy?  It  may  not,  indeed,  be  an  ideally 
good  mode  of  reaction,  may  even  contain  elements  of  positive 
detriment,  and  yet  may  be  the  vent  for  valuable  organic  instincts 
seeking  after  those  qualities  of  freedom,  joy  and  personal  dis- 
tinction that  are  essential  to  a  life  worth  living.1 

Or  take  the  gravest  of  all  defects  of  working-class  expenditure, 
the  drink-bill.  This  craving,  hostile  as  it  is  to  the  physical  and 
moral  life  of  man,  is  not  understood,  and  therefore  cannot  be 
effectively  eradicated,  unless  due  account  is  taken  of  certain 
emotional  implications.  The  yielding  to  drink  is  not  mere  brutal- 
ity. Brutes  do  not  drink.  It  is  in  some  part  the  response  to  an 
instinct  to  escape  from  the  imprisonment  in  a  narrow  cramping 
environment  which  affords  no  scope  for  aspiration  and  achieve- 
ment. It  may  indeed  be  said  that  the  drinker  does  not  aspire 
and  does  not  achieve.  He  is  doubtless  the  victim  of  an  illusion. 
But  it  is  a  certain  dim  sense  of  a  higher  freer  life  that  lures  him 
on.  'Elevation'  is  what  is  sought. 

'  Kings  may  be  blessed  but  Tarn  was  glorious 
O'er  a'  the  ills  o'  life  victorious. ' 

1  On  the  side  of  Consumption  as  of  Production  a  progressive  society  that  has  not 
abandoned  itself  to  excessive  rationalism  will  recognise  the  desirability  of  keeping 
a  scope  for  ' bonne  chance'  and  ' hazard '.  Cf  Tarde,  I.,  p.  130. 


128  WORK  AND  WEALTH 

Or  take  still  another  item  of  working-class  expenditure  fre- 
quently condemned  as  a  typical  example  of  extravagance,  the 
relatively  large  expense  of  funerals.  Is  this  to  be  dismissed  off- 
hand as  mere  wanton  waste?  A  more  human  interpretation  will 
find  in  it  other  elements  of  meaning.  In  the  ordinary  life  of 
'the  common  people'  there  is  little  scope  for  that  personal  dis- 
tinction which  among  the  upper  classes  finds  expression  in  so 
many  ways.  The  quiet  working-man  or  woman  has  never  for  a 
brief  hour  through  a  long  lifetime  stood  out  among  his  fellows, 
or  gathered  round  him  the  sympathetic  attention  of  his  neigh- 
bours. Is  it  wholly  unintelligible  or  regrettable  that  those  who 
care  for  him  should  wish  to  give  this  narrow,  thwarted,  obscure 
personality  a  moment  of  dignity  and  glory?  The  sum  of  life  is 
added  up  in  this  pomp  of  reckoning,  and  the  family  is  gathered 
into  a  focus  of  neighbourly  attention  and  good-feeling,  the  out- 
ward emblems  of  honour  are  displayed,  and  a  whole  range  of 
human  emotions  finds  expression.  Such  excess  as  exists  must  be 
understood  as  a  natural  fruit  of  those  aspiring  qualities  of  per- 
sonality which,  thwarted  in  their  natural  and  healthy  growth  by 
narrowness  of  opportunity,  crave  this  traditional  outlet. 

In  fact,  the  more  closely  we  study  the  conventional  factors  in 
consumption,  the  less  are  we  able  to  dismiss  them  out  of  hand  as 
mere  extravagance  or  waste.  Some  organic  impulse,  half  physi- 
cal, half  psychical,  nearly  always  enters  into  even  the  least  de- 
sirable elements.  A  margin  of  expenditure,  either  conventional 
or  expressing  individual  caprice,1  which  serves  to  evoke  pleasure, 
to  stir  interest,  and  above  all  to  satisfy  a  sense  of  personal  dig- 
nity, even  though  at  the  expense  of  some  more  obvious  and  im- 
mediate utilities,  may  be  justified  by  considerations  of  individual 
and  social  progress. 

§  4.  Such  considerations  must  not,  however,  be  pressed  very 
far  in  the  defence  even  of  the  most  firmly-rooted  elements  of 
conventional  consumption.  For,  though  the  deeper  organic 
forces  which  work  through  'natural  selection'  must  eliminate 

1  Though  the  term  '  conventional '  appears  formally  to  preclude  the  play  of  in- 
dividual taste  or  judgment,  it  is  in  fact  only  in  such  expenditures  that  these  quali- 
ties obtain  scope  for  expression.  For  though  convention  prescribes  the  general  mode 
of  such  expenditure,  it  leaves  a  far  krger  scope  for  personal  choice  and  capricious 
variation  than  in  the  more  necessary  elements  of  expenditure. 


CLASS  STANDARDS  OF  CONSUMPTION  129 

the  worst  or  most  injurious  modes  of  expenditure  from  the  per- 
manent standard  of  a  race  or  class,  it  may  leave  elements  fraught 
with  grave  danger.  For  neither  the  animal  nor  the  spiritual  na- 
ture of  man  is  equipped  with  a  selective  apparatus  for  testing 
accurately  for  purposes  of  organic  welfare  the  innumerable  fresh 
applicants  for  'consumption'  which  appear  as  the  evolution  of 
wants,  on  the  one  hand,  and  of  industries  upon  the  other,  becomes 
more  complex  and  more  rapid.  An  extreme  instance  will  enforce 
my  meaning.  To  take  a  Red  Indian  or  a  Bantu  from  a  natural 
and  social  environment  relatively  simple  and  staple,  and  to 
plunge  him  suddenly  into  the  swirl  of  a  modern  Western  city  life 
is  to  court  physical  and  moral  disaster.  Why?  Because  the 
pressures  of  animal  desires  or  the  emotions  of  pride  and  curiosity, 
which  were  regulated  by  effective  'taboos'  in  the  primitive  life 
from  which  he  is  drawn,  now  work  their  will  unchecked.  For 
the  'taboos'  of  civilised  society  are  both  ill-adapted  to  the  emo- 
tional texture  of  his  nature,  and  in  their  novelty  and  complexity 
are  not  adequately  comprehended.  But  even  for  those  born  and 
bred  in  the  environment  of  a  rapidly  changing  civilisation  there 
are  evidently  great  hazards.  Not  only  individual  but  widely 
collective  experiments  in  novelties  of  consumption  will  often  be 
injurious.  This  may  be  explained  in  the  first  instance  as  due  to 
the  perversion  or  defective  working  of  the  'instincts'  originally 
designed  to  protect  and  promote  the  life  of  the  individual  and 
the  species.  An  animal  living  upon  what  may  be  termed  un- 
modified nature  is  possessed  of  instincts  which  make  poisonous 
plants  or  animals  repellent  to  its  taste.  A  man  living  in  a  highly 
modified  environment  finds  such  shreds  of  instinctive  tastes  as 
he  possesses  inadequate  to  the  risk  of  rejecting  the  fabricated 
foods  brought  from  remote  quarters  of  the  earth  to  tempt  his 
appetite.  If  this  holds  of  articles  of  food,  where  errors  may  be 
mortal  and  where  some  protection,  however  insufficient,  is  still 
furnished  by  the  palate  and  the  stomach,  still  more  does  it  hold 
of  the  'higher'  tastes  comparatively  recently  implanted  in  civil- 
ised man.  'Bad  tastes'  thus  may  introduce  the  use  of  books  or 
art  that  disturb  the  mind  without  informing  it,  recreations  that 
distract  and  dissipate  our  powers  without  recreating  and  restor- 
ing them.  Nor  does  the  'social  organism'  furnish  reliable  checks 


i3o  WORK  AND  WEALTH 

which  shall  stop  the  spread  of  individual  errors  into  conventional 
consumption. 

§  5.  The  question  of  individual  errors  and  wastes  in  the  pro- 
cess of  evolving  standards  of  consumption  must  not  detain  us. 
For  though  it  rightly  falls  within  the  scope  of  a  fully  elaborated 
valuation  of  consumption,  it  must  not  be  allowed  to  intrude  into 
our  more  modest  endeavour  to  discuss  the  several  grades  of 
wants  which  comprise  a  class  standard  of  consumption.  The 
relative  size  of  the  wastes  or  defects  of  the  conventional  factors 
in  a  class  standard  will  not  indeed  depend  upon  the  mere  addi- 
tion of  the  perversion  of  the  separate  choices  of  its  individuals. 
For  a  convention  is  not  produced  by  a  mere  coincidence  of  sep- 
arate actions  of  individual  desire. 

It  may  be  well  here  to  revert  to  the  distinction  which  we  found 
convenient  to  employ  in  our  analysis  of  the  human  value  of 
different  forms  of  work,  viz.  the  distinction  between  creation  and 
imitation.  Here  it  will  take  shape  in  an  enquiry  as  to  the  ways 
in  which  new  wants  are  discovered  and  pass  into  conventional 
use.  Let  us  take  for  an  example  the  case  of  a  medicine  which  has 
become  a  recognised  remedy  for  a  disease.  Among  animals  or 
'primitive'  man  the  habit  of  eating  a  curative  herb  may  be  re- 
garded as  due  to  an  organic  instinct  common  to  each  member  of 
the  herd  or  group.  Such  consumption,  however,  would  not  really 
fall  within  the  category  of  our  'conventional  consumption'.  It 
would  in  effect  be  confined  to  a  limited  number  of  articles  con- 
taining strong  elements  of  'survival  value',  in  a  pre-economic 
period,  though,  as  soon  as  tribal  society  began  to  evolve  the  med- 
icine man,  his  prescriptions  would  add  many  elements  of  waste 
and  error.  But  the  consumables  whose  origin  we  are  now  con- 
sidering must  be  regarded  as  involving  invention  or  discovery, 
and  conscious  imitation  or  adoption  by  the  group.  Unless  we 
suppose  that  the  chewing  of  cinchona  bark  had  a  backing  of  in- 
stinctive adaptation,  and  so  passed  by  tradition  into  later  ages 
of  Indian  life,  we  must  hold  that  the  first  beginnings  of  the  use  of 
quinine  as  a  cure  for  intermittent  fevers  in  South  America  were 
due  either  to  chance  or  to  early  empiricism  in  treatment.  Some 
person,  probably  enjoying  distinction  in  his  tribe,  tried  cinchona 
bark  and  recovered  of  his  fever,  others  tried  it  upon  this  example 


CLASS  STANDARDS  OF  CONSUMPTION  131 

and  got  benefit,  and  so  the  fame  of  the  remedy  spread  first  from 
a  single  centre,  and  afterwards  from  a  number  of  other  personal 
centres  by  conscious  imitation.  Or,  similarly,  take  the  adoption 
of  some  article  of  diet,  such  as  sugar  or  tobacco,  which  is  an  ele- 
ment not  of  prime  physical  utility  but  of  comfort  or  pleasure. 
The  first  men  who  chewed  the  sugar-cane,  or  tried  the  fumes  of 
the  herba  nicotina,  must  be  deemed  to  have  done  so  'by  accident'. 
Liking  the  result,  they  repeated  the  experiment  by  design,  and 
this  personal  habit  become  the  customary  habit  of  the  group, 
moulded  by  a  tradition  continuously  supported  by  a  repetition 
of  the  feeling  which  attended  the  first  chance  experience. 

Such  accretions  to  a  standard  of  consumption  may  be  regarded 
as  possessing  guarantees  of  utility  or  safeguards  against  strong 
positive  disutility  in  their  method  of  adoption.  They  have  grown 
into  the  conventional  standard  'on  their  merits'.  Those  'merits' 
may  indeed  be  variously  estimated  from  the  'organic'  stand- 
point. Quinine  has  a  high  organic  virtue,  sugar  perhaps  an  even 
wider  but  less  vital  virtue,  while  the  virtue  of  tobacco  may  be 
purely  superficial  and  compensated  by  considerable  organic  de- 
merits. But  both  discovery  and  propagation  have  been  in  all 
these  cases  'natural'  and  'reasonable'  processes,  in  the  plain  or- 
dinary acceptation  of  these  terms.  Some  actual  utility  has  been 
discovered  and  recognised,  and  new  articles  thus  incorporated 
in  a  standard  of  consumption,  either  for  regular  or  special  use, 
have  at  any  rate  satisfied  a  preliminary  test  of  organic  welfare. 

If  all  new  habits  of  consumption  arose  in  this  fashion,  and  the 
preliminary  test  could  be  considered  thoroughly  reliable,  the 
economy  of  the  evolution  of  standards  of  consumption  would  be 
a  safe  and  sound  one.  This  hypothesis  in  its  very  form  indicates 
the  several  lines  of  error  discernible  in  the  actual  evolution  of 
class  standards.  A  falsification  of  the  standard,  involving  the 
admission  of  wasteful  or  positively  noxious  consumables,  may 
arise,  either  in  the  initial  stage  of  invention,  or  in  the  process  of 
imitative  adoption.  This  will  occur  wherever  the  initial  or  the 
imitative  process  is  vitiated  by  an  extraneous  motive.  A  very 
small  proportion  of  medicines  in  customary  use  among  primi- 
tive peoples  have  the  organic  validity  of  quinine.  Most  of  them 
are  '  charms ',  invented  by  medicine  men,  not  as  the  result  either 


i32  WORK  AND  WEALTH 

of  a  chance  or  planned  experiment,  but  as  the  work  of  an  im- 
agination operating  upon  the  lines  of  an  empirical  psychology, 
in  which  the  relation  of  the  actual  or  known  properties  of  the 
medicine  towards  the  disease  play  no  appreciable  part.  So  a 
whole  magical  pharmacopoeia  will  be  erected  upon  a  basis  of 
totemist  and  animist  beliefs,  mingled  with  circumstantial  mis- 
conceptions and  gratuitous  fabrications,  and  containing  no  or- 
ganic utility.  Each  addition  or  variant  will  begin  as  an  artificial 
invention  and  will  be  adopted  for  reasons  of  prestige,  authority 
or  fear,  carrying  none  of  that  organic  confirmation  which  se- 
cured its  position  for  quinine.  The  limit  of  error  in  such  cases 
will  be  that  the  medicine  must  not  frequently  cause  a  serious 
and  immediate  aggravation  of  the  suffering  of  the  patient.  The 
patent  or  '  conventional '  medicines  among  civilised  peoples  must 
be  considered  in  the  main  as  containing  a  falsification  of  stand- 
ard of  the  same  kind,  though  different  in  degree.  As  the  primi- 
tive medicine  man,  called  upon  to  cure  a  fever  or  a  drought,  is 
primarily  motived  by  the  desire  to  maintain  or  enhance  his  per- 
sonal or  caste  prestige,  while  the  adoption  of  his  specific  into  a 
convention  is  due  to  a  wholly  irrational  authority  or  to  a  wholly 
accidental  success,  so  is  it  with  a  large  proportion  of  modern  rem- 
edies. Even  in  the  orthodox  branches  of  the  medical  profession 
the  process  of  converting  vague  empiricism  into  scientific  ex- 
periment has  gone  such  a  little  way  as  to  furnish  no  guarantee 
for  the  full  organic  efficacy  of  many  of  the  treatments  upon 
which  the  patient  public  spends  an  increasing  share  of  its  in- 
come. But  as  regards  the  profession  there  is  at  any  rate  some 
basis  of  confidence  in  the  disinterested  application  of  science  to 
the  discovery  of  genuine  organic  utility. 

In  the  patent  medicine  trade  there  is  very  little.  Here  we 
have  a  condition  very  little  better  than  that  of  the  power  of  the 
witch-doctor  in  primitive  society.  The  maxim  'caveat  emptor' 
carries  virtually  no  security,  for  the  guidance  of  the  palate  is 
ruled  out,  while  the  test  of  experience,  except  for  purgation  or 
for  some  equally  simple  and  immediate  result,  is  nearly  worthless. 

§  6.  When  the  invention  and  propagation  of  a  mode  of  con- 
sumption have  passed  into  the  hands  of  a  trade,  the  guarantees 
of  organic  utility,  the  checks  against  organic  injury,  are  at  their 


CLASS  STANDARDS  OF  CONSUMPTION  133 

weakest.  For  neither  process  is  directed,  either  by  instinct  or 
reason,  along  serviceable  channels.  Where  the  commercial  mo- 
tive takes  the  initiative,  there  can  be  no  adequate  security  that 
the  articles  which  pass  as  new  elements  into  a  standard  of  con- 
sumption shall  be  wealth,  not  illth.  Where  an  invention  is  stim- 
ulated to  meet  a  genuinely  'long-felt  need',  the  generality  and 
duration  of  that  need  may  be  a  fair  guarantee  of  utility.  But 
this  is  not  the  case  where  the  supply  precedes  and  evokes  the 
demand,  the  more  usual  case  under  developed  commercialism. 
Neither  in  the  action  of  the  inventor,  nor  in  the  spread  of  the 
new  habit  of  consumption,  is  there  any  safe  gauge  of  utility. 
The  inventor,  or  commercial  initiator,  is  only  concerned  with  the 
question,  Can  I  make  and  sell  a  sufficient  quantity  of  this  article 
at  a  profit?  In  order  to  do  so,  it  is  true,  he  must  persuade  enough 
buyers  that  they  'want*  the  article  and  'want'  it  more  than 
some  other  articles  on  which  they  otherwise  might  spend  their 
money.  To  unreflecting  persons  this,  no  doubt,  appears  a  suffi- 
cient test  of  utility.  But  is  it?  The  purchaser  must  be  made  to 
feel  or  think  that  the  article  is  'good'  for  him  at  the  time  when 
it  is  brought  before  his  notice.  For  this  purpose  it  must  be  en- 
dowed with  some  speciously  attractive  property,  or  recommended 
as  possessing  such  a  property.  A  cheap  mercerised  cotton  cloth, 
manufactured  to  simulate  silk,  sells  by  its  inherent  superficial 
attraction.  A  new  line  in  drapery  'pushed'  into  use  by  the  re- 
peated statement,  false  at  the  beginning,  that  'it  is  worn',  illus- 
trates the  second  method.  In  a  word,  the  arts  of  the  manufac- 
turer and  of  the  vendor,  which  have  no  direct  relation  whatever 
to  intrinsic  utility,  overcome  and  subjugate  the  uncertain,  un- 
trained or  'artificially'  perverted  taste  of  the  consumer.  Thus 
it  arises  that  in  a  commercial  society  every  standard  of  class 
comfort  is  certain  to  contain  large  ingredients  of  useless  or  nox- 
ious consumption,  articles,  not  only  bad  in  themselves,  but  often 
poisoning  or  distorting  the  whole  standard.  The  arts  of  adulter- 
ation and  of  advertising  are  of  course  responsible  for  many  of 
the  worst  instances.  A  skilled  combination  of  the  two  processes 
has  succeeded  in  cancelling  the  human  value  of  a  very  large  pro- 
portion of  the  new  increments  of  money  income  in  the  lower 
middle  and  the  working-classes,  where  a  growing  susceptibility 


i34  WORK  AND  WEALTH 

to  new  desires  is  accompanied  by  no  intelligent  checks  upon  the 
play  of  interested  suggestion  as  to  the  modes  of  satisfying  these 
desires. 

Where  specious  fabrication  and  strong  skilled  suggestion  co- 
operate to  plant  new  ingredients  in  a  standard  of  consumption, 
there  is  thus  no  security  as  to  the  amount  of  utility  or  disutility 
attaching  to  the  'real  income'  represented  by  these  'goods'. 
But  this  vitiation  of  standards  is  not  equally  applicable  to  all 
grades  of  consumption,  or  to  all  classes  of  consumers.  Some 
kinds  of  goods  will  be  easier  to  falsify  or  to  adulterate  than  others, 
some  classes  of  consumers  will  be  easier  to  'impose  upon'  than 
others.  These  considerations  will  set  limits  upon  the  amount  of 
waste  and  'illth'  con  tamed  in  the  goods  and  services  which  com- 
prise our  real  income. 

First,  as  to  the  arts  of  falsification.  Several  laws  of  limitation 
here  emerge.  Some  materials,  such  as  gold  and  rubber,  have  no 
easily  procurable  and  cheaper  substitutes  for  certain  uses.  Other 
goods  are  in  some  considerable  degree  protected  from  imitation 
and  adulteration  by  the  survival  of  reliable  tests  and  tastes,  touch 
and  sight,  in  large  numbers  of  consumers.  This  applies  to  simpler 
sorts  of  goods  whose  consumption  is  deepest  in  the  standard  and 
has  a  strong  basis  of  vital  utility.  It  will  be  more  difficult  to  adul- 
terate bread  or  plain  sugar  to  any  large  extent  than  sauces  or 
sweets:  it  will  be  easier  to  fake  photographs  than  to  pass  off 
plaice  for  soles.  But  it  cannot  be  asserted  as  a  general  truth  that 
the  necessaries  are  better  defended  against  encroachments  of 
adulteration  and  other  modes  of  deception  than  conveniences, 
and  conveniences  than  luxuries.  Indeed,  there  are  two  consider- 
ations that  tell  the  other  way.  A  manufacturer  or  merchant 
who  can  palm  off  a  cheaper  substitute  for  some  common  neces- 
sary of  life,  or  some  well-established  convenience,  has  a  double 
temptation  to  do  so.  For,  in  the  first  place,  the  magnitude  and 
reliability  of  the  demand  make  the  falsification  unusually  profit- 
able. In  the  second  place,  so  far  as  a  large  proportion  of  articles 
are  concerned,  he  can  rely  upon  the  fact  that  most  consumption 
of  necessaries  lies  below  the  margin  of  clear  attention  and  criti- 
cism. Except  in  the  case  of  certain  prime  articles  of  diet,  it  is 
probable  that  a  consumer  is  more  likely  to  detect  some  change 


CLASS  STANDARDS  OF  CONSUMPTION  135 

of  quality  in  the  latest  luxury  added  to  his  standard  than  in  the 
habitual  articles  of  daily  use,  such  as  his  shoe-leather  or  his  soap. 
In  fact,  so  well  recognised  is  this  protection  afforded  to  the  seller 
by  the  unconsciousness  which  habit  brings  to  the  consumer, 
that,  in  catering  for  quite  new  habits,  such  as  cereal  breakfast 
foods  or  cigarettes,  the  manufacturer  waits  until  the  original 
attractions  of  his  goods  have  stamped  themselves  firmly  in  cus- 
tomary use,  before  he  dares  to  lower  the  quality  or  reduce  the 
quantity. 

These  considerations  make  it  unlikely  that  we  can  discover 
a  clear  law  expressing  the  injury  of  commercialism  in  terms  of 
the  greater  or  less  organic  urgency  of  the  wants  ministered  to 
by  the  different  orders  of  commodities.  It  will  even  be  difficult 
to  ascertain  whether  the  arts  of  adulteration  or  false  substitu- 
tion play  more  havoc  among  the  necessaries  than  among  the 
luxuries  of  life.  In  neither  is  there  any  adequate  safeguard  for 
the  organic  worth  of  the  articles  bought  and  sold,  though  in  both 
there  must  be  held  to  be  a  certain  presumption  favourable  to 
some  organic  satisfaction  attending  the  immediate  act  of  con- 
sumption. If  a  '  law '  of  falsification  can  be  found  at  all,  it  is  more 
likely  to  emerge  from  a  comparative  study  not  of  necessaries, 
conveniences,  comforts  and  luxuries,  in  a  class  standard,  but  of 
the  various  sorts  of  satisfactions  classified  in  relation  to  the  needs 
which  underlie  them.  Where  goods  are  consumed  as  soon  as 
they  are  bought,  and  by  some  process  involving  a  strong  appeal 
to  the  senses,  there  is  less  chance  for  vulgar  fraud  than  where 
consumption  is  gradual  or  postponed,  and  is  not  attended  by 
any  moment  of  vivid  realisation.  Other  things  equal,  one  might 
expect  more  easily  to  sell  shoddy  clothing  than  similarly  damaged 
food :  the  adulteration  of  a  jerry-built  house  is  less  easily  detected, 
or  less  adequately  reprobated,  than  that  of  a  jerry-built  suit  of 
clothes. 

Along  similar  lines  we  might,  in  considering  non-material 
consumption,  urge  that  there  are  more  safeguards  for  utility  in 
the  expenditure  upon  books  or  music-hall  performances  than 
upon  education  or  church  membership.  And  in  a  sense  this  is 
true.  If  I  buy  a  book  or  attend  a  concert,  I  am  surer  to  get 
what  I  regard  as  a  quid  pro  quo  for  my  expenditure  than  in  the 


136  WORK  AND  WEALTH 

case  of  a  prolonged  process  involving  many  small  consecutive 
acts. 

So  far  as  this  is  true,  it  means  that  relics  of  organic  guidance 
are  more  truly  operative  in  some  kinds  of  satisfaction  than  in 
others,  and  furnish  some  better  check  upon  the  deception  which 
commercialism  may  seek  to  practise.  But,  of  course,  our  valua- 
tion of  such  checks  will  depend  upon  how  far  we  can  accept  them 
as  reliable  tests,  not  of  some  short-range  immediate  satisfaction, 
but  of  the  wider  individual  and  social  welfare.  The  fact  that  so 
many  notoriously  bad  habits  can  be  acquired  by  reason  of  an 
immediate  'organic'  attractiveness  that  is  a  false  clue  to  the 
larger  welfare,  must  put  us  on  our  guard  against  accepting  any 
easy  law  based  on  the  test  of  'natural'  tastes. 

§  7.  But,  in  considering  the  degradation  of  standards  of  con- 
sumption, it  is  well  to  bring  some  closer  analysis  to  bear  upon  the 
processes  of  suggestion  and  adoption  that  are  comprised  in  'imi- 
tation'. In  analysing  the  forms  of  wealth,  the  goods  and  ser- 
vices, which  are  the  real  income  of  the  nation,  in  terms  of  their 
production,  we  recognised  that,  other  things  equal,  the  human 
cost  of  any  body  of  that  wealth  varied  directly  with  the  amount 
of  routine  or  purely  imitative  work  put  into  it,  and  inversely 
with  the  amount  of  creative  or  individual  work.  That  judgment, 
however,  we  felt  bound  to  qualify  by  the  consideration  that  a 
certain  proportion  of  routine  work,  though  in  itself  perhaps  dis- 
tasteful and  uninteresting,  had  an  organic  value  both  for  the 
individual  and  for  society.  How  far  can  we  apply  an  analogous 
judgment  to  the  same  body  of  Wealth  on  its  consumption  side? 
Can  we  assume  that  the  utility  of  consumption  of  any  given 
body  of  wealth  varies  directly  with  the  amount  of  free  personal 
expression  which  its  use  connotes,  and  inversely  with  the  routine 
or  conventional  character  it  bears?  Evidently  not.  The  same 
analysis  does  not  apply.  The  chief  reason  for  the  difference  has 
already  been  indicated,  by  pointing  out  that,  in  a  modern  in- 
dustrial society,  each  man,  as  producer,  is  highly  specialised,  as 
consumer  highly  generalised.  The  high  human  costs  of  routine 
work  were,  we  saw,  a  direct  result  of  this  specialising  process. 
A  little  routine  work  of  several  sorts,  regularly  practised,  would 
involve  no  organic  cost,  and  might  indeed  yield  a  fund  of  posi- 


CLASS  STANDARDS  OF  CONSUMPTION  137 

tive  utility  as  a  wholesome  regime  of  exercise,  provided  it  was  not 
carried  so  far  as  to  encroach  upon  the  fund  of  energy  needed  for 
the  performance  of  other  special  work,  creative  and  interesting. 

Indeed,  the  usual  economic  justification  of  the  excessive  divi- 
sion of  labour  existing  at  present  in  advanced  industrial  societies 
is  that  it  is  essential  to  yield  that  large  body  of  objective  wealth 
which,  by  its  distribution,  enriches  and  gives  variety  to  the  con- 
sumption of  all  members  of  the  society.  The  producer  is  sacri- 
ficed to  the  consumer,  the  damage  done  to  each  man  in  his  former 
capacity  being  more  than  compensated  by  the  benefits  conferred 
upon  him  in  his  latter  capacity. 

The  full  validity  of  this  doctrine  will  be  considered  when  we 
gather  together  the  two  sides  of  our  analysis  and  consider  the 
inter-relations  between  production  and  consumption  as  an  as- 
pect of  the  problem  of  human  values.  At  present  we  may  begin 
by  accepting  variety  of  consumption  as  a  condition  in  itself  fa- 
vourable to  the  maximisation  of  human  welfare.  This  assump- 
tion is  not,  however,  quite  self-evident.  The  routine  factors, 
in  a  standard  of  consumption  (and  a  standard  qua  standard 
consists  of  routine),  so  far  as  they  are  laid  down  under  the  direc- 
tion of  an  instinctive  or  a  rational  evolution  of  wants,  must  be 
regarded  as  containing  a  minimum  of  waste  or  disutility.  Since 
they  are  also  the  foundation  and  the  indispensable  condition  for 
all  the  'higher'  forms  of  material  or  non-material  consumption 
in  which  the  conscious  personality  of  individuals  finds  expression, 
they  may  be  held  to  contain  per  unit  a  maximum  of  human  value. 
From  this  standpoint  there  would  seem  to  emerge  a  law  of  the 
economy  of  consumption,  to  the  effect  that  the  maximum  of  so- 
cial welfare  would  be  got  from  a  distribution  of  wealth  which 
absorbed  the  entire  product  in  this  routine  satisfaction  of  the 
common  needs  of  life.  This  economy  need  not  be  conceived 
merely  hi  terms  of  a  uniform  standard  of  material  satisfactions. 
A  wider  interpretation  of  life  and  of  necessaries  might  extend  it 
so  as  to  cover  many  higher  grades  of  satisfaction,  all  the  'joys 
that  are  in  widest  commonalty  spread. '  The  natural  evolution 
of  such  an  economy  of  consumption  might,  it  is  arguable,  yield 
the  greatest  quantity  of  social  welfare. 

§  8.  But  a  high  uniform  level  of  welfare  throughout  society 


138  WORK  AND  WEALTH 

does  not  exhaust  the  demands  of  human  welfare.  It  evidently 
overstresses  the  life  of  the  social  as  against  the  individual  or- 
ganism, imposing  a  regimen  of  equality  which  absorbs  the  many 
into  the  one.  Now,  desirous  to  hold  the  balance  fair  between 
the  claims  of  individual  personality  and  of  society,  we  cannot 
acquiesce  in  an  ideal  of  economical  consumption  which  makes 
no  direct  provision  for  the  former.  So  far,  however,  as  the  con- 
sumption of  an  individual  is  of  a  routine  character,  expressing 
only  the  needs  of  a  human  nature  held  in  common  with  his  fel- 
lows, it  does  not  really  express  his  individuality  at  all.  The  real- 
isation of  the  unique  values  of  his  personality,  and  the  conscious 
satisfaction  that  proceeds  from  this  individual  expression,  can 
only  be  got  by  activities  which  lie  beyond  the  scope  of  custom 
and  convention.  Though  this  issue  has  most  important  bearings 
that  are  outside  the  economic  field,  it  is  also  vitally  connected 
with  the  use  of  economic  goods.  For,  unless  a  due  proportion 
of  the  general  income  (the  aggregate  of  goods  and  services)  is 
placed  at  the  free  disposal  of  individuals  in  such  forms  as  to  nour- 
ish and  stimulate  the  wholesome  and  joyous  expansion  of  their 
powers,  that  social  progress  which  first  manifests  itself  in  the 
free  experimental  and  creative  actions  of  individuals  whose 
natures  vary  in  some  fine  and  serviceable  way  from  the  common 
life,  will  be  thwarted.  This  brings  us  to  a  better  understanding 
of  the  nature  and  origin  of  the  human  injury  and  waste  contained 
in  large  sections  of  that  conventional  consumption  which  plays 
so  large  and  so  depressing  a  part  in  every  class  standard  of  com- 
fort. Where  the  production  of  an  economic  society  has  grown 
so  far  as  to  yield  a  considerable  and  a  growing  surplus  beyond 
that  required  for  survival  purposes,  this  surplus  is  liable  to  sev- 
eral abuses.  Instead  of  being  applied  as  food  and  stimulus  to 
the  physical  and  spiritual  growth  of  individual  and  social  life, 
it  may  be  squandered,  either  upon  excessive  satisfaction  of  ex- 
isting routine  wants  in  any  class  or  classes,  or  in  the  stimulation 
and  satisfaction  of  more  routine  wants  and  the  evolution  of  a 
complex  conventional  standard  of  consumption,  containing  in 
its  new  factors  a  diminishing  amount  of  human  utility  or  even 
an  increasing  amount  of  human  costs.  If  the  industrial  struc- 
ture is  such  that  particular  groups  of  business  men  can  make 


CLASS  STANDARDS  OF  CONSUMPTION  139 

private  gains  by  stimulating  new  wasteful  modes  of  conventional 
consumption,  this  process,  as  we  have  seen,  is  greatly  facilitated. 

But,  after  all,  the  business  motive  is  not  in  itself  an  adequate 
explanation.  Business  firms  suggest  new  wants,  but  the  sus- 
ceptibility to  such  suggestions,  the  active  imitation  by  which 
a  new  article  passes  into  the  conventional  consumption  of  a  group 
or  class,  requires  closer  consideration.  Falsification  of  a  standard 
can  seldom  be  understood  as  a  mere  perversion  of  the  free  choice 
of  individuals.  A  convention  is  not  produced  by  a  mere  coinci- 
dence of  separate  choices.  Imitation  plays  an  important  part  in 
the  contagion  and  infection  of  example.  In  endeavouring  to  as- 
sess the  human  utility  of  the  consumption  of  wealth  we  see  the 
play  of  several  imitative  forces.  Current  Prestige,  Tradition, 
Authority,  Fashion,  Respectability  supplement  or  often  displace 
the  play  of  individual  taste,  good  or  bad,  in  moulding  a  class 
and  family  standard  of  consumption.  The  psychology  and 
sociology  of  these  distinctively  imitative  forces  which  form  or 
change  standards  are  exceedingly  obscure. 

The  merely  gregarious  instinct  may  lead  to  the  spread  in  a 
class  or  group  of  any  novelty  which  attracts  attention  and  is  not 
offensive.  Where  supported  by  any  element  of  personal  pres- 
tige, such  novelty,  irrespective  of  its  real  virtues  or  uses,  may 
spread  and  become  embedded  in  a  standard  of  consumption. 
The  beginnings  of  every  fashion  largely  belong  to  this  order  of 
imitation.  Some  prestige  is  usually  needed  fairly  to  launch  a 
new  fashion;  once  launched  it  spreads  mainly  by  'gregarious- 
ness',  the  instinct  to  be,  or  look,  or  act,  like  other  people.  The 
limits  of  error,  disutility  or  inconvenience,  which  can  be  set  upon 
a  novelty  of  fashion,  appear  to  depend  mainly  upon  the  initial 
force  of  prestige.  The  King  might  introduce  into  London  so- 
ciety a  really  inconvenient  high  hat,  though  the  Queen  perhaps 
could  not  carry  a  full  revival  of  the  crinoline. 

Fashions  change  but  they  leave  deposits  of  conventional  ex- 
penditure behind.  What  is  at  first  fashionable  often  remains  as 
respectable  and  lives  long  in  the  conventional  habits  of  a  class. 
Every  class  standard  is  encrusted  with  little  elements  of  dead 
fashion. 

§  9.  But  this  formative  influence  of  Prestige  itself  demands 


i4o  WORK  AND  WEALTH 

fuller  consideration.  For  it  not  merely  implants  elements  of 
expenditure  in  the  standard  of  consumption,  but  infects  the 
standard  itself. 

A  true  standard  would  rest  on  a  basis  of  organic  utility,  ex- 
penditure being  apportioned  so  as  to  promote  the  soundest,  full- 
est human  life.  But  all  conventional  consumption  is  determined 
largely  by  valuations  imposed  by  the  class  possessing  most  pres- 
tige. It  is,  of  course,  a  commonplace  that  fashions  in  dress,  and 
in  certain  external  modes  of  consumption,  descend  by  snobbish 
imitation  from  high  life  through  the  different  social  strata,  each 
class  copying  the  class  above.  It  is  a  matter  of  far  more  vital 
importance  that  religion,  ethics,  art,  literature  and  the  whole 
range  of  intellectual  activities,  manners,  amusements,  take  their 
shapes  and  values  largely  by  the  same  process  of  infiltration  from 
above. 

This  is  not  the  case  everywhere.  In  many  nations  the  dis- 
tinctions of  caste,  class,  locality  or  occupation,  are  so  strong  as 
to  preclude  the  passage  of  habits  of  material  consumption,  man- 
ners, tastes  and  ideas,  from  one  social  stratum  to  another.  The 
exclusive  possession  of  a  code  of  life,  of  language,  thought  and 
feelings  by  a  caste  or  class,  is  itself  a  matter  of  pride,  and  often 
of  legal  protection.  This  holds  not  only  of  most  Asiatic  civilisa- 
tions but,  though  less  rigorously,  of  those  European  countries 
which  have  not  been  fully  subjected  to  the  dissolving  forces  of 
industrialism. 

But  in  such  countries  as  England  and  the  United  States,  where 
the  industrial  arts  are  rapidly  evolving  new  products  and  stim- 
ulating new  tastes,  and  where  at  the  same  time  the  social  strata 
present  a  continuous  gradation  with  much  movement  from  one 
stratum  to  another,  the  process  of  imitation  by  prestige  is  very 
rapid  and  general. 

The  actual  expenditure  of  the  income  of  every  class  in  these 
countries  is  very  largely  determined,  not  by  organic  needs,  but 
by  imitation  of  the  conventional  consumption  of  the  class  im- 
mediately above  in  income  or  in  social  esteem.  That  conven- 
tional consumption  in  its  turn  is  formed  by  imitation  of  the  class 
above.  The  aristocracy,  plutocracy,  or  class  with  most  power  or 
prestige,  thus  makes  the  standards  for  the  other  classes. 


CLASS  STANDARDS  OF  CONSUMPTION  141 

Now,  even  if  it  were  a  real  aristocracy,  a  company  of  the  best, 
it  by  no  means  follows  that  a  standard  of  living  good  for  them 
would  be  equally  good  for  other  social  grades.  But  there  would 
be  at  least  a  strong  presumption  in  its  favour.  To  copy  good  ex- 
amples, even  if  the  copying  is  defective,  is  an  elevating  practice, 
and  in  as  much  as  the  essentials  of  humanity  are  found  alike  in 
all,  thoughtless  imitation  of  one's  betters  might  raise  one's  own 
standard.  If  in  a  society  the  men  of  light  and  leading  occupied 
this  place  because  they  had  discovered  a  genius  for  the  art  of 
noble  living,  the  swift  unconscious  imitation  of  their  mode  of 
life,  the  morals  and  manners  of  this  aristocracy,  would  surely  be 
the  finest  schooling  for  the  whole  people:  the  models  of  the  good, 
the  true,  the  beautiful,  which  they  afforded,  would  inform  each 
lower  grade,  according  to  its  capacity. 

But  where  the  whole  forces  of  prestige  and  imitation  are  set 
on  a  sham  aristocracy,  copying  as  closely  as  possible  their  modes 
of  consumption,  their  ways  of  thought  and  feeling,  their  valua- 
tions and  ideals,  incalculable  damage  and  waste  may  ensue.  For 
the  defects  in  the  standard  of  the  upper  few  will,  by  imitation, 
be  magnified  as  well  as  multiplied  in  the  lower  standards  of  the 
many.  Let  me  illustrate. 

If  gambling  is  bad  for  the  upper  classes,  its  imitation  becomes 
progressively  worse  as  it  descends,  poisoning  the  life  and  con- 
suming a  larger  proportion  of  the  diminishing  margin  of  the  in- 
come of  each  class.  If  the  inconvenience  of  decorative  dress  is  bad 
for  rich  women,  who  live  a  life  of  ease  and  leisure,  its  imita- 
tion by  the  active  housewives  of  the  middle,  and  the  women- 
workers  of  the  lower  classes,  inflicts  a  graver  disutility.  For  the 
waste  of  income  is  more  injurious  and  the  physical  impediments 
to  liberty  of  movement  are  more  onerous.  It  is  the  immeasur- 
able importance  of  this  prestige  of  the  upper  class,  percolating 
through  all  lower  social  grades,  and  imposing,  not  merely  ele- 
ments of  conventional  consumption,  but  standards  and  ideas  of 
life  which  affect  the  whole  mode  of  living,  that  requires  us  to 
give  closer  consideration  to  the  life  of  the  leisure  class. 

§  10.  Here  we  can  find  valuable  aid  in  a  remarkable  book  en- 
titled The  Theory  of  the  Leisure  Class,  by  Mr.  Veblen,  an  Ameri- 
can sociologist.  Regarded  as  a  scientific  study,  which  it  rightly 


i42  WORK  AND  WEALTH 

claims  to  be,  this  book  has  two  considerable  defects,  one  of 
manner,  one  of  matter.  Its  analysis  is  conducted  with  a  half- 
humorous  parade  of  pompous  terminology  apt  to  wear  upon  the 
temper  of  the  reader.  Its  exaggerated  stress  upon  a  single  strain 
of  personality,  as  a  dominant  influence  in  the  formation  of  habits 
and  the  direction  of  conduct,  is  a  more  serious  blemish  in  a  work 
of  profound  and  penetrating  power.  But  for  our  present  purpose, 
that  of  discovering  the  elements  of  waste  in  national  consumption, 
it  is  of  first-rate  importance. 

Mr.  Veblen's  main  line  of  argument  may  be  summarised  as 
follows.  In  primitive  society  war  and  the  chase  will  be  the  chief 
means  by  which  men  may  satisfy  that  craving  for  personal  dis- 
tinction and  importance  which  is  the  most  enduring  and  impor- 
tunate of  psychical  desires.  Personal  prowess,  mainly  physical, 
displayed  in  fight  or  hunt,  will  secure  leadership  or  ascendency 
in  tribal  life.  So  those  trophies  which  attest  such  prowess,  the 
skulls  or  scalps  of  enemies,  the  skins  of  slain  animals,  or  the  live 
possession  of  tame  animals,  will  be  the  most  highly-prized  forms 
of  property.  When  the  capture  and  enslavement  of  enemies  has 
taken  the  place  of  promiscuous  slaughter,  the  size  and  variety 
of  his  retinue  of  slaves  for  personal  service,  concubinage,  or 
merely  decorative  show,  attest  the  greatness  of  the  warrior-chief. 
When  the  industrial  arts  are  sufficiently  developed,  slaves  will 
be  set  to  produce  such  other  forms  of  property,  enlarged  housing, 
quantities  of  showy  garments,  cultivated  fields,  herds  of  cattle,  as 
afford  conspicuous  evidence  of  the  personal  prowess  of  the  chief. 
Glory,  far  more  than  utility  or  comfort,  continues  to  be  the  dom- 
inant motive. 

As  civilisation  begins  to  make  way,  the  notion  of  what  consti- 
tutes personal  prowess  begins  to  be  modified.  Though  physical 
force  may  still  remain  a  chief  ingredient,  skill  and  cunning,  wis- 
dom in  counsel,  capacity  for  command  and  law-making,  come  to 
be  recognised  as  also  giving  prestige.  As  not  only  the  strong  man 
by  his  strength,  but  the  cunning  man  by  his  cunning,  can  get 
that  wealth  or  property  which  are  the  insignia  of  prowess,  prop- 
erty will  however  still  be  valued  by  its  owner  mainly  for  the 
prestige  it  affords  him  among  his  fellows.  It  will  still  for  the 
most  part  take  shape  in  external  forms  of  adornment  or  magnifi- 


CLASS  STANDARDS  OF  CONSUMPTION  143 

cence.  As  it  develops  into  the  culminating  form  of  the  oriental 
court,  the  element  of  display  will  remain  the  paramount  consid- 
eration, to  which  even  the  sense-enjoyments  of  the  owner  will  be 
secondary. 

The  effect  of  this  early  Unking  of  property  to  personal  prowess 
will  be  that  in  the  general  mind  of  man  the  possession  of  prop- 
erty is  honorific.  It  secures  for  its  owner  a  presumption  of  per- 
sonal greatness.  Therefore,  its  possession  must  be  kept  in  full 
and  constant  evidence,  especially  where  inheritance  destroys  the 
direct  presumption  of  the  personal  prowess  of  the  actual  owner. 
Hence  the  two  essential  features  of  the  mode  of  living  of  the  dom- 
inant class  or  caste,  ostentatious  waste  and  conspicuous  leisure. 
For  thus  the  prestige  of  property  is  best  enforced.  Gorgeous 
palaces  with  luxurious  grounds,  magnificent  banquets  and  enter- 
tainments, extravagant  refinements  of  sensual  luxury,  adorn- 
ments of  fabrics,  jewels  and  articles  of  laborious  skill,  magnificent 
tombs  and  other  monuments — the  elaborate  parade  of  waste, 
in  order  to  fasten  on  the  common  imagination  the  sense  of  wonder 
and  of  admiration  of  the  person  who  could  afford  so  lavish  a 
waste!  The  family  of  the  rich  man  is  chiefly  valued  as  an  in- 
strument for  making  this  display  effective.  His  wife  or  wives 
must  do  no  work,  not  even  copy  his  parasitic  activities;  they  must 
stand  as  open  monuments  of  conspicuous  leisure,  their  personal 
adornments,  their  retinues  of  servants,  the  entire  elaborate 
ritual  of  their  futile  lives,  must  be  devoted  to  showing  how  much 
their  possessor  can  afford  to  waste.  Such  was  the  life  of  the  aris- 
tocracy in  olden  and  mediaeval  days! 

It  has  passed  in  most  essentials,  by  tradition  and  imitation, 
to  the  life  of  the  upper  class  in  modern  civilised  nations.  The 
modes  and  conceptions  of  personal  prowess  and  prestige  have  in- 
deed shifted.  The  man  of  business  has  dethroned  the  warrior 
or  the  political  chieftain.  The  typical  great  man  of  our  time  is 
the  great  entrepreneur,  the  financier  who  directs  the  flow  of  capi- 
tal and  rules  prices  on  change,  the  railway  or  shipping  magnate 
who  plans  a  combine,  the  able  and  astute  merchant,  who  con- 
trols a  market,  the  manufacturer  who  conducts  a  great  produc- 
tive business,  the  organiser  of  a  successful  departmental  store. 
The  personal  qualities  and  activities  involved  in  these  tasks  are 


144  WORK  AND  WEALTH 

very  different  from  those  possessed  by  barbarian  chieftains  or 
oriental  despots.  Add  to  such  men  the  surviving  landed  aristo- 
cracy of  rent-receivers,  and  a  considerable  number  of  families  that 
live  on  dividends,  taking  no  real  part  in  the  administration  of 
industry,  and  we  have  a  synopsis  of  the  class  which  to-day  wields 
prestige.  Though  the  elaboration  of  modern  arts  of  pleasure 
directs  a  great  part  of  the  expenditure  of  this,  our  upper  class, 
the  traditional  habits  of  ostentatious  waste  and  conspicuous 
leisure  as  modes  of  glory  are  still  paramount  motives.  Most 
rich  people  value  riches  less  for  the  pleasures  they  afford  than  for 
the  social  consideration,  the  personal  distinction,  they  procure. 
The  craving  to  realise  superiority  over  others,  as  attested  by 
their  servility  or  imitation,  the  power  of  money  to  make  others 
do  your  will,  the  sense  of  freedom  to  realise  every  passing  ca- 
price, these  remain  the  chief  value  of  riches,  and  mould  the  valua- 
tions of  life  for  the  bulk  of  the  well-to-do. 

Such  are  the  inevitable  effects  of  easily-gotten  and  excessive 
wealth  upon  the  possessors.  So  far  as  they  operate,  they  in- 
duce futile  extravagance  in  expenditure.  Instead  of  making  for 
utility,  they  make  for  disutility  of  consumption.  Such  is  the 
gist  of  this  analysis  of  the  leisured  life. 

§  ii.  Expenditure  which  is  to  be  effectively  ostentatious,  so 
as  to  impress  its  magnificence  upon  the  largest  number  of  other 
people,  cannot  be  directed  to  the  satisfaction  of  a  real  personal 
want,  even  a  bad  want.  Futility  is  of  its  essence.  The  very 
type  of  this  expenditure  is  a  display  of  fireworks:  there  is  no 
other  way  of  consuming  so  large  a  quantity  of  wealth  in  so  short 
a  time  with  such  sensational  publicity  and  with  no  enduring  ef- 
fect whatever.  This  private  extravagance  may  perhaps  be  par- 
alleled in  public  expenditure  by  the  squandering  of  millions  upon 
war-ships  which  are  not  needed,  will  never  be  used,  and  will  be 
obsolete  within  a  few  years  of  their  construction. 

The  defects  which  every  sane  social  critic  finds  in  the  modes 
of  living  of  the  rich,  their  frivolity,  triviality  and  futility,  are  il- 
lustrations of  Mr.  Veblen's  thesis.  Perhaps  the  largest  complex 
of  forms  of  futile  waste,  waste  of  money  and  of  time,  is  con- 
tained in  the  performance  of  what,  with  curious  aptness  of 
phrase,  are  termed  'social  duties',  the  idle  round  of  visits,  enter- 


CLASS  STANDARDS  OF  CONSUMPTION  145 

tainments  and  functions  which  constitutes  the  'society  life'.  I 
speak  of  the  aptness  of  the  term  'social  duties'.  This  is  no  par- 
adox, but  merely  the  finest  instance  of  that  perversion  of  values 
and  valuations  which  is  inherent  in  the  situation.  For  it  is  es- 
sential to  the  accuracy  of  this  analysis  that  the  rich  members  of 
society  should  regard  their  most  futile  activities  as  'duties',  and 
their  small  section  of  humanity  as  '  society '. 

Of  the  expenditure  which  is  laid  out  on  the  satisfaction  of 
material  wants,  the  waste  or  disutility  will  often  be  considerable. 
But  Nature  is  strong  enough  to  enforce  some  sense  and  modera- 
tion in  the  satisfaction  of  primary  organic  desires.  While,  there- 
fore, there  is  much  luxury  and  waste  in  the  material  standard 
of  comfort  of  the  rich,  we  do  quite  wrong  to  find  in  food  and 
clothing  and  other  material  consumption  our  chief  instances  of 
luxury  and  waste.  It  is  in  the  non-material  expenditure  that 
the  proportion  of  waste  or  disutility  is  largest.  The  great  moral 
law,  corruptio  optimi  pessima,  requires  that  this  be  so.  If  we 
seek  the  largest  sources  of  injurious  waste  in  the  standard  of  the 
well-to-do  classes,  we  shall  find  them  in  the  expenditure  upon 
recreation,  education  and  charity. 


CHAPTER  XI 

SPORT,   CULTURE  AND  CHARITY 

§  i .  It  is  no  mere  chance  that  makes  sport  the  special  field  for 
the  attainment  and  display  of  personal  prestige  among  the  well- 
to-do  classes.  Primitive  man  in  his  early  struggle  for  life  had 
to  put  all  his  powers  of  body  and  mind,  all  his  strength  and  cun- 
ning, into  the  quick,  sure,  and  distant  discovery  of  beasts  or 
other  men  who  would  destroy  him.  He  must  pursue  and  kill 
them,  or  successfully  avoid  them.  He  must  seek  out  animal  or 
vegetable  foods,  tracking  them  by  signs  and  snares,  rapid  of 
foot,  keen  of  eye  and  scent,  quick,  strong,  and  accurate  of  grasp. 
To  run  and  spring,  to  climb  and  swim  and  strike  and  throw  were 
necessary  human  accomplishments.  They  had  a  high  survival 
value.  Nature  had  to  evolve  and  maintain  a  man  who  had  the 
capacity  to  do  these  things  well,  and  who  was  willing  to  undergo 
the  necessary  toil  and  pain  of  acquiring  and  exercising  these  arts 
and  crafts.  To  ride,  to  shoot,  to  manage  boats,  were  occupa- 
tions of  prime  utility.  Successful  mating  was  also  necessary  for 
survival,  and  so  the  arts  of  courtship,  dancing,  music,  decoration, 
and  various  displays  of  grace  and  vigour  were  evolved.  The 
simple  activities  that  were  elaborated  into  these  arts  of  hunting, 
fighting,  mating,  were  instinctive,  and  strong  feelings  of  pleasure 
were  attached  to  them,  as  Nature's  lure.  When  reason,  or  con- 
scious cunning,  came  to  cooperate  with  instinct,  complicating 
and  refining  the  useful  arts,  the  specific  pleasures  of  instinctive 
satisfaction  were  accompanied  by  a  general  sense  of  personal  ela- 
tion or  pride.  Now,  in  man,  as  in  other  animals,  practice  was 
needed  for  the  successful  performance  of  these  useful  activities. 
This  practice  takes  the  form  of  play,  a  more  or  less  realistic  sim- 
ulation of  the  practices  of  fighting,  hunting,  courtship,  in  which, 
however,  considerable  scope  exists  for  variations  and  surprises, 
the  survival  value  of  which  is  real,  though  indirect.  Since  these 
forms  of  play  appeal  to  and  exercise  the  same  activities  as  are 

146 


SPORT,  CULTURE  AND  CHARITY  147 

involved  in  the  serious  affairs  of  life,  the  same  sorts  of  satisfac- 
tion are  attached  to  them.  The  natural  meaning  of  play  is 
that  it  is  a  preparation  for  work,  i.  e.  for  the  arduous,  painful, 
and  often  dangerous  tasks  involved  in  'the  struggle  of  life,'  and 
the  pleasure  of  play  is  the  inducement  to  the  acquisition  of  this 
useful  skill. 

§  2.  If  this  be  so,  it  may  be  possible  for  some  men  to  suck  the 
pleasure  from  the  play  without  performing  the  useful  work  for 
which  it  is  a  preparation.  The  play  instincts  can  be  made  to 
yield  a  desirable  life  of  interest  and  pleasure  to  any  class  of  men 
who  are  enabled  to  get  others  to  perform  their  share  of  useful 
work,  and  thus  to  provide  them  with  the  time,  energy  and  ma- 
terial means  for  the  elaboration  of  the  play  side  of  life.  Such 
is  the  physical  explanation  of  the  sportsman.  The  play  which 
Nature  designed  as  means  to  life,  he  takes  as  an  end,  and  lives 
'a  sporting  life'.  Some  of  his  sports  bear  on  the  surface  few 
signs  of  biological  play  about  them.  The  manual  and  mental 
dexterity  of  such  indoor  games  as  bridge  and  billiards,  appear 
quite  unrelated  to  the  arduous  pursuits  of  mountaineering  or 
big-game  hunting.  Between  these  two  lie  the  great  majority  of 
active  sports,  such  as  shooting,  racing,  and  the  various  games  of 
ball.  No  one  who  analyses  carefully  the  feelings  of  pleasure  got 
from  a  boundary  hit,  a  run  with  the  ball,  a  neck-to-neck  race, 
or  any  other  athletic  achievement,  can  doubt  their  nature. 

Fighting,  hunting,  fishing,  climbing,  exploring,  reduced  to 
sports,  contain  just  as  much  '  realism '  as  is  needed  to  evoke  the 
pleasurable  excitement  which  sustained  these  skilful  efforts  when 
they  belonged  to  the  struggle  for  life.  Some  of  the  imitations 
may  be  so  close  to  reality  as  to  recall  in  almost  its  full  intensity 
the  primal  thrill,  as  in  tiger-stalking,  in  boxing,  or  rock  climbing. 
In  ball-games  the  fictitious  circumstances  call  for  more  imagina- 
tion, though  the  pleasure  of  the  actual  stroke  is  chiefly  a  race 
memory  of  a  blow  struck  at  an  enemy,  or  of  a  blow  warded  off. 
No  one  can  doubt  the  nature  of  the  fierce  pleasure  of  the  football 
scrimmage  with  its  mortal  make-believe. 

Although  in  many  sports  some  element  of  physical  risk  is 
needed  to  sustain  the  realism,  it  is  usually  reduced  to  trifling 
dimensions.  This  is  also  true  of  the  painful  endurance  inci- 


i48  WORK  AND  WEALTH 

dental  to  the  primitive  struggle.  The  modern  sportsman  or 
explorer  commonly  devises  ways  of  economising  both  his  per- 
sonal risk  and  his  personal  effort.  Beaters  find  the  animal  or 
bird  for  him  to  shoot;  native  porters  and  guides  carry  food  for 
him,  and  ease  his  path.  His  object  is  to  secure  the  maximum 
pleasure  of  achievement  with  the  minimum  risk  and  effort.  Per- 
haps the  most  highly-elaborated  example  is  the  playful  revival 
of  the  migratory  and  exploring  instincts,  from  the  picnic  to  the 
world-tour,  with  the  complex  apparatus  of  pleasure-travel  which 
occupies  so  large  a  part  in  the  life  of  the  well-to-do  classes.  The 
luxurious  life  of  travel  in  which  the  motor-car,  the  train  de  luxe, 
or  the  yacht  carries  men  and  women  from  the  gorgeous  hotel  of 
one  beauty  spot  to  that  of  another,  is  made  pleasurable  or  tol- 
erable by  waking  up  the  dim  shadow  of  some  wandering  ances- 
tor, whose  hunting  or  pastoral  habits  required  some  satisfaction 
to  evoke  the  life-preserving  effort.  Camping-out  and  caravan- 
ning are  somewhat  more  realistic  reproductions,  bringing  in  more, 
of  the  gregarious  or  corporate  instinct  of  the  tribe. 

How  subtle  are  the  artifices  by  which  human  cunning  seeks 
to  exploit  the  past  is  best  illustrated,  however,  in  the  purely 
spectatorial  or  sympathetic  surroundings  of  sport.  To  play 
football  is  one  remove  from  battle,  to  watch  the  game  is  two 
removes,  to  watch  the  "tape"  or  follow  the  scores  in  the  news- 
papers is  three  removes.  Yet  millions  of  little  thrills  of  satisfac- 
tion are  got  from  this  simulation  of  a  simulated  fight.  Blended 
in  various  degrees  with  other  zests,  of  hazard,  of  petty  cunning, 
and  avarice,  where  betting  enters  into  sport,  the  sporting  inter- 
est ranks  highest  of  all  in  the  scale  of  values  among  the  able- 
bodied  males  of  all  classes  in  English-speaking  peoples. 

Added  to  the  pleasure  from  the  output  of  strength  or  skill  in 
sport  is  the  general  sentiment  of  exultation,  the  sense  of  glory. 
To  what  must  that  be  attributed?  Not  to  the  magnitude  of  the 
strength  or  skill.  A  navvy  may  display  greater  strength  or  en- 
durance in  his  work,  a  trapper  or  a  common  fisherman  a  finer 
skill  in  catching  his  prey.  But  the  true  glory  of  sportsmanship 
is  denied  them.  Why?  Because  their  work  is  useful,  and  they 
are  doing  it  for  a  living.  The  glory  of  the  successful  sportsman 
is  due  to  the  fact  that  his  deeds  are  futile.  And  this  conspicuous 


SPORT,  CULTURE  AND  CHARITY  149 

futility  is  at  the  root  of  the  matter.  The  fact  that  he  can  give 
time,  energy,  and  money  to  sport  testifies  to  his  possession  of 
independent  means.  He  can  afford  to  be  an  idler,  and  the  more 
obviously  useless  and  expensive  the  sport,  the  higher  the  pres- 
tige attaching  to  it.  His  personal  glory  of  strength,  endurance, 
or  skill  is  set  in  this  aureole  of  parasitism.  The  crucial  test  of 
this  interpretation  is  very  simple.  Let  it  turn  out  that  a  Mara- 
thon winner,  who  seemed  to  be  a  gentleman,  was  really  a  pro- 
fessional, what  a  drop  in  his  personal  prestige!  The  professional 
is  a  man  who  has  to  earn  a  living,  his  reputation  as  a  sportsman 
is  damaged  by  that  fact.  Can  there  be  any  more  convincing 
proof  that  the  high  prestige  of  sport  is  due  to  the  evidence  of 
financial  prowess  which  it  affords? 

The  hunting  and  the  fighting  instincts  evidently  underlie  the 
pleasure  of  nearly  all  the  exclusively  male  sports.  Doubtless 
other  instinctive  satisfactions  enter  in,  such  as  the  gregarious 
instinct  with  its  conscious  elaboration  of  esprit  de  corps.  When- 
ever any  game  or  sport  brings  the  sexes  into  relation  with  one 
another,  the  mating  instincts  are  evidently  involved.  The  cross- 
ing of  war  with  sex  in  the  theory  and  practice  of  chivalry  was  a 
conscious  and  artistic  blending  of  these  pleasure  motives. 

But  this  treatment  of  sport  as  a  frivolous  pursuit  of  pleasure 
ignores  one  important  aspect.  Sport,  it  will  be  urged,  after  all 
has  health  for  its  permanent  utility.  It  is  exercise  for  the  body 
and  diversion  for  the  mind.  It  wards  off  the  natural  conse- 
quences of  the  purely  parasitic  life,  which  a  private  income  ren- 
ders possible,  by  providing  work-substitutes.  The  primal  law, 
'in  the  sweat  of  thy  face  shalt  thou  eat  bread,'  is  gracefully 
evaded  by  games  that  include  a  gentle  perspiration.  Golf  may 
take  the  place  of  spade-labour  to  win  appetite  and  digestion; 
bridge  will  save  the  brain  from  absolute  stagnation.  So  Nature's 
self-protective  cunning  elaborates  these  modes  of  sham-work. 

§  3.  The  social  condemnation  of  a  sporting-life  is  two-fold.  In 
the  first  place,  it  diverts  into  lower  forms  of  activity  the  zests 
and  interests  intended  to  promote  a  life  of  work  and  art.  The 
sporting-life  and  standards  choke  the  finer  arts.  The  sportsman 
and  the  gamester  are  baser  artists  choosing  the  lower  instead  of 
the  higher  modes  of  self-realisation  in  manual  and  intellectual 


iSo  WORK  AND  WEALTH 

skill.  This  maintenance  of  barbarian  standards  of  values  by  the 
classes  possessing  social  prestige  is  a  great  obstacle  to  the  develop- 
ment of  science,  art,  and  literature.  In  the  second  place,  sport 
spoils  the  spontaneity  and  liberty  of  play,  which  is  a  necessity 
of  every  healthy  life.  It  spoils  it  for  the  sportsman  by  reason  of 
its  artificiality  and  its  excess.  For  the  sporting-life  does  not  sat- 
isfy those  who  practise  it.  It  carries  the  Nemesis  of  boredom. 
The  sense  of  triviality  and  of  futility  gradually  eats  through, 
and  the  make-believe  realism,  when  confronted  with  the  serious 
values  of  life,  shows  its  emptiness.  A  heavier  social  damage  is 
the  economic  cost  which  the  expensive  futility  imposes.  For 
sport  involves  the  largest  diversion  of  unearned  income  into  un- 
productive expenditure.  Not  only  does  it  dedicate  to  extrava- 
gant waste  a  larger  share  of  the  land,  the  labour,  and  the  enter- 
prise of  men  than  any  other  human  error,  unless  it  be  war  itself, 
but  it  steals  the  play-time  of  the  many  to  make  the  over-leisure 
of  the  few.  If  the  parasitic  power  which  sustains  the  sporting- 
life  were  taken  away,  the  world  would  not  be  duller  or  more 
serious.  On  the  contrary,  play  would  be  more  abundant,  freer, 
more  varied,  and  less  artificial  in  its  modes. 

The  identification  of  a  sportsman  with  a  gentleman  has  carried 
great  weight  in  the  unconscious  settling  of  social  values,  and  in 
England  has  been  subtly  serviceable  as  a  sentimental  safeguard 
against  the  attacks  upon  the  economic  supports  not  only  of  land- 
lordism but  of  other  wealth  which  has  covered  itself  with  the 
trappings  of  sport. 

The  relative  prestige  of  other  occupations  is  determined  to  a 
considerable  extent  by  their  association  with  the  sporting-life 
or  with  the  original  activities  which  sport  reproduces.  Not  only 
the  idle  landowner,  but  the  yeoman,  and  in  a  less  degree  the  ten- 
ant farmer,  enjoy  a  social  consideration  beyond  the  measure  of 
their  pecuniary  standing,  by  virtue  of  the  opportunities  for  hunt- 
ing and  other  sport  which  they  enjoy.  Part  of  the  reputation  of 
the  military  and  the  naval  services  is  explained  by  the  survival 
of  the  barbarian  feeling  that  a  life  of  hazard  and  rapine  contains 
finer  opportunities  for  physical  prowess  than  a  life  of  productive 
activity.  Though  a  good  deal  of  this  prestige  belongs  to  the  glory 
of  'command'  and  extends  even  to  a  great  employer  of  labour, 


( 

-.— *^-^ 

SPORT,  CULTURE  ANTTCHARITY  151 

the  glamour  of  the  soldier's,  hunter's,  sportsman's  life  hangs  in 
a  less  degree  about  all  whose  occupations,  however  servile,  keep 
them  in  close  contact  with  these  barbarian  activities.  A  pub- 
lican, a  professional  cricketer,  a  stud-groom,  a  gamekeeper,  enjoy 
among  their  companions  a  dignity  derived  from  their  association 
with  the  sporting-life. 

§  4.  If  physical  recreations  thus  carry  prestige,  so  in  a  less  de- 
gree and  in  certain  grades  of  society  do  intellectual  recreations. 
Once  a  sportsman  alone  had  a  claim  to  be  regarded  as  a  gentle- 
man. Only  in  comparatively  modern  times  did  the  association 
of  'a  scholar  and  a  gentleman'  seem  plausible.  Even  now  prow- 
ess of  the  mind  can  seldom  compete  in  glory  with  prowess  of  the 
body.  The  valuation  of  achievements  current  in  our  public- 
schools  persists,  though  with  some  abatement,  among  all  sorts 
and  conditions  of  men.  But  as  mental  skill  becomes  more  and 
more  the  means  of  attaining  that  financial  power  which  is  the 
modern  instrument  of  personal  glory,  it  rises  hi  social  esteem. 
As  manners,  address,  mental  ability  and  knowledge  more  and 
more  determine  personal  success,  intellectual  studies  become  in- 
creasingly reputable. 

It  might  appear  at  the  first  sight  that  the  highest  reputation 
would  attach  to  those  abilities  and  studies  which  had  the  high- 
est immediate  utility  for  money-making.  But  here  the  barba- 
rian standard  retains  a  deflecting  influence.  To  possess  money 
which  you  have  not  made  still  continues  to  be  far  more  honor- 
ific than  to  make  money.  For  money-making,  unless  it  be  by 
loot  or  gambling,  involves  addiction  to  a  business  life  instead  of 
the  life  of  a  leisured  gentleman.  So  it  comes  to  pass  that  studies 
are  valued  more  highly  as  decorative  accomplishments  than  as 
utilities.  A  man  who  can  have  afforded  to  expend  long  years 
in  acquiring  skill  or  knowledge  which  has  no  practical  use, 
thereby  announces  most  dramatically  his  possession,  or  his 
father's  possession,  of  an  income  enabling  him  to  lead  the  life 
of  an  independent  gentleman.  The  scale  of  culture-values  is 
largely  directed  by  this  consideration.  Thus  not  only  the  choice 
of  subjects  but  the  mode  of  treatment  in  the  education  of  the 
children  of  the  well-to-do  is,  generally  speaking,  in  inverse  ratio 
to  their  presumed  utility.  The  place  of  honour  accorded  to 


i52  WORK  AND  WEALTH 

dead  languages  is,  of  course,  the  most  patent  example.  Great 
as  the  merits  of  Greek  and  Latin  may  be  for  purposes  of  intel- 
lectual and  emotional  training,  their  predominance  is  not  mainly 
determined  by  their  merits,  but  by  the  traditional  repute  which 
has  made  them  the  chosen  instruments  for  a  parade  of  'useless' 
culture.  Though  some  attempt  is  made  in  recent  times  to  ex- 
tract from  the  teaching  of  the  ' classics'  the  finer  qualities  of  the 
'humanities'  which  they  contain,  this  has  involved  a  revolt 
against  the  pure  '  scholarship '  which  sought  to  exclude  even  such 
refined  utilities  and  to  confine  the  study  of  the  classics  to  a  grace- 
ful, skilful  handling  of  linguistic  forms  and  a  purely  superficial 
treatment  of  the  thought  and  knowledge  contained  in  the  chosen 
literature.  It  is  significant  that  even  to-day  'culture'  primarily 
continues  to  imply  knowledge  of  languages  and  literature  as  ac- 
complishments, and  that,  though  mathematics  and  natural 
sciences  enter  more  largely  into  the  academic  curriculum,  they 
continue  to  rank  lower  as  studies  in  the  education  of  our  wealthy 
classes. 

Most  convincing  in  its  testimony  to  the  formation  of  intellec- 
tual values  is  the  treatment  of  history  and  modern  English 
literature.  Although  for  all  purposes  of  culture  and  utility,  it 
might  have  been  supposed  that  the  study  of  the  thought,  art, 
and  events  of  our  own  nation  and  our  own  times,  would  be  of 
prime  importance,  virtually  no  place  is  given  to  these  subjects. 
History  and  literature,  so  far  as  they  figure  at  all,  are  treated  not 
in  relation  to  the  life  of  to-day,  but  as  dead  matter.  Other  sub- 
jects of  strictly  vital  utility,  such  as  physiology  and  hygiene, 
psychology  and  sociology,  find  no  place  whatever  in  the  general 
education  of  our  schools  and  universities,  occupying  a  timid  posi- 
tion as  '  special '  subjects  in  certain  professional  courses. 

Pedagogues  sometimes  pretend  that  this  exclusion  of  'utility' 
tests  for  the  subjects  and  the  treatment  in  our  system  of  educa- 
tion rests  upon  sound  educational  principles,  in  that,  ignoring 
the  short-range  utilities  which  a  commercial  or  other  'practical' 
training  desiderates,  they  contribute  to  a  deeper  and  a  purer 
training  of  the  intellectual  faculties.  But  having  regard  to  the 
part  played  by  tradition  and  ecclesiastical  authority  in  the  es- 
tablishment of  present-day  educational  systems,  it  cannot  be 


SPORT,  CULTURE  AND  CHARITY  153 

admitted  that  they  have  made  a  serious  case  for  the  appraise- 
ment of  studies  according  to  their  human  values.  Probably  our 
higher  education,  properly  tested,  would  be  found  to  contain  a 
far  larger  waste  of  intellectual  'efficiency'  than  our  factory  sys- 
tem of  economic  efficiency.  And  this  waste  is  primarily  due  to 
the  acceptance  and  survival  of  barbarian  standards  of  culture, 
imperfectly  adjusted  to  the  modern  conditions  of  life,  and  chiefly 
sustained  by  the  desire  to  employ  the  mind  for  decorative  and 
recreative,  rather  than  for  productive  or  creative  purposes.  Art, 
literature  and  science  suffer  immeasurable  losses  from  this  mis- 
government  of  intellectual  life.  The  net  result  is  that  the  vast 
majority  of  the  sons  and  daughters  even  of  our  well-to-do  classes 
grow  up  with  an  exceedingly  faulty  equipment  of  useful  knowl- 
edge, no  trained  ability  to  use  their  intellects  or  judgments  freely 
and  effectively,  and  with  no  strong  desire  to  attempt  to  do  so. 
They  thus  remain  or  become  the  dupes  of  shallow  traditions,  or 
equally  shallow  novelties,  under  the  guise  of  scientific,  philo- 
sophic, economic  or  political  principles  which  they  have  neither 
the  energy  of  mind  nor  the  desire  to  test,  but  which  they  permit 
to  direct  their  lives  and  conduct  in  matters  of  supreme  importance 
to  themselves  and  others. 

As  education  is  coming  to  take  a  larger  place  as  an  organised 
occupation,  and  more  time,  money  and  energy  are  claimed  for 
it,  the  necessity  of  a  revaluation  of  intellectual  values  on  a  sane 
basis  of  humanism  becomes  more  exigent  than  ever.  For  there 
is  a  danger  of  a  new  bastard  culture  springing  up,  the  product 
of  a  blending  of  the  barbarian  culture,  descending  by  imitation 
of  the  upper  classes,  with  a  too  narrowly  utilitarian  standard  im- 
provised to  convert  working-class  children  into  cheap  clerks 
and  shopmen.  Our  high-schools  and  local  universities  are  al- 
ready victims  to  this  mesalliance  between  'culture'  and  'busi- 
ness', and  the  treatment  of  not  a  few  studies,  history  and  eco- 
nomics in  particular,  is  subject  to  novel  risks. 

§  5.  Dilettantism  is  the  intellectual  equivalent  of  sport.  What 
is  the  moral  equivalent?  The  sporting-life  has  an  ethics  of  its 
own,  the  essence  of  which  lies  in  eschewing  obligations  with 
legal  or  other  compulsory  external  sanctions,  in  favour  of  a  vol- 
untary code  embodying  the  mutual  feelings  of  members  of  a 


iS4  WORK  AND  WEALTH 

superior  caste.  In  an  aristocracy  of  true  sportsmen  honesty 
and  sexual  'morality'  are  despised  as  bourgeois  virtues,  while 
justice  is  too  compulsory  and  too  equalitarian  for  acceptance. 
Honour  takes  the  place  of  honesty,  good  form  of  morals,  fair- 
play  and  charity  of  justice.  It  is  the  code  of  the  barbarian  super- 
man or  chieftain,  qualified,  softened  and  complicated  to  suit  the 
conditions  of  the  modern  play-life.  Courage  and  endurance, 
fidelity,  generosity  and  mercy  are  his  virtues:  temperance,  mod- 
esty, humility,  gratitude,  have  no  proper  place  in  such  a  code, 
which  is  indeed  based  upon  a  free  exercise  of  the  physical  func- 
tions for  personal  pleasure  and  glory. 

The  hazard  belonging  to  a  sporting  life  makes  for  superstition. 
Nobody  is  more  crudely  superstitious  than  the  gambler,  and 
everybody  to  whom  life  is  primarily  a  game  conceives  of  it  as 
proceeding  by  rules  which  may  be  evaded  or  tampered  with. 
This  aspect  of  the  sporting  character  gave  the  priestly  caste  its 
chief  opportunity  to  get  power.  So  pietism  was  grafted  on  the 
sportsman  and  the  fighting-man,  and  religion  kept  a  hold  on 
the  ruling  and  possessing  classes,  adapting  its  moral  teaching 
to  his  case.  The  wide  divergence  of  British  Christianity  from 
the  teaching  of  the  gospels  finds  its  chief  explanation  in  this  ne- 
cessity of  adaptation.  Its  doctrines  and  its  discipline  had  to  be 
moulded  so  as  to  fit  the  character  and  conduct  of  powerful  men, 
who  not  only  would  repudiate  its  inner  spiritual  teaching,  but 
whose  lust,  pride,  cruelty  and  treachery,  the  natural  outcome  of 
their  animal  life,  were  constantly  leading  them  to  violate  the 
very  code  of  honour  they  professed.  As  industry  and  property, 
peace  and  order,  became  more  settled  and  wide-spread,  there 
came  up  from  below  a  powerful  commercial  class,  whose  eco- 
nomic and  social  requirements  evolved  a  morality  in  which  the  so- 
called  puritan  virtues  of  industry,  thrift,  honesty,  temperance, 
sexual  purity,  prevailed,  and  a  Christianity  designed  primarily 
to  evoke  and  to  sustain  them.  Just  as  the  intellectual  culture 
of  the  aristocracy  came  to  clash  with  the  utilitarian  education 
of  the  bourgeois  and  to  produce  the  confusing  compromise  which 
at  present  prevails,  so  with  the  differing  ethics  of  the  same  two 
classes.  The  incursion  of  the  wealthy  tradesman  into  '  high  life ' 
and  of  the  landed  gentry  into  the  'city'  has  visibly  broken 


SPORT,  CULTURE  AND  CHARITY  155 

down  the  older  standards  both  of  morals  and  of  manners.  The 
prestige  of  the  sporting  virtues  has  played  havoc  with  the  sim- 
plicity and  austerity  of  the  puritan  morals  and  creeds,  though  it 
may  fairly  be  maintained  that  the  saner  utilities  of  the  latter 
have  tempered  to  a  perceptible  degree  the  morals  and  manners 
of  the  sportsman.  Luxuries  and  frivolities  of  a  more  varied  order 
have  largely  displaced  the  older  sporting-life,  introducing  into 
it  some  elements  of  more  intellectual  skill  and  interest,  though 
it  remains  primarily  devoted  to  the  pursuit  of  pleasurable  sensu- 
ous futilities.  !*r-w; 

But,  though  the  modes  of  the  leisure  life  are  shifting,  the  defi- 
nitely parasitic  attitude  and  career  which  it  embodies  remain  un- 
changed. The  sense  of  justice  and  of  humanity  among  its  mem- 
bers is  as  defective  as  ever.  This  truth  is  sometimes  concealed 
by  the  change  in  social  areas  that  is  taking  place.  Class  honour 
and  comradeship  have  a  somewhat  wider  scope  as  the  range  of 
effective  intercourse  expands,  and  classes  which  formerly  were 
wide  apart  come  partially  to  fuse  with  one  another,  or  are  brought 
within  the  range  of  sympathy,  as  regards  their  more  sympathetic 
members.  So  intercourse  upon  a  fairly  equal  basis  can  take 
place  hi  such  a  country  as  England  between  most  persons  who 
have  reached  a  certain  level  of  refinement  of  living.  This  cer- 
tainly implies  some  transfusion  of  moral  standards,  the  union  of 
common  sentiments  regarding  industry  and  property  with  the 
downward  spread  of  a  modified  conception  of  a  sporting  life. 
Indeed,  imitation  has  gone  a  certain  way  towards  infecting  all 
the  stabler  grades  of  the  working-classes  with  this  blend  of  bar- 
barian and  puritan  valuations.  While  the  larger  pecuniary 
means  and  leisure  which  they  possess  has  introduced  into  their 
standard  of  life  sporting  habits  largely  imitative  of  the  fully 
leisured  aristocracy,  it  has  implanted  habits  of  'respectability' 
as  the  contribution  of  the  bourgeois  type  immediately  above 
them  in  the  social  scale. 

§  6.  But  when  we  dip  down  below  the  bourgeois  and  the  regu- 
lar working-classes  which  he  has  drilled  in  industry,  we  find  a 
lower  leisure  class  whose  valuations  and  ways  of  living  form  a 
most  instructive  parody  of  the  upper  leisure  class.  Both  in 
country  and  town  life  these  types  appear.  They  include  'gyp- 


I56  WORK  AND  WEALTH 

sies',  tramps,  poachers  and  other  vagabonds,  who  have  never 
been  enlisted  in  the  army  of  industry,  or  have  deserted  in  favour 
of  a  'free '  life  of  hazard,  beggary  and  plunder.  In  towns  natural 
proclivities  or  misfortune  account  for  considerable  groups  of 
casual  workers,  professional  or  amateur  thieves  and  prostitutes, 
street-sellers,  corner-men,  kept  husbands,  and  other  parasites 
who  are  a  burden  on  the  working-classes.  Alike  in  country  and 
in  town,  these  men  practise,  so  far  as  circumstances  allow,  the 
same  habits  and  exhibit  the  same  character  as  the  leisure  class 
at  the  top.  The  fighting,  sporting,  roving,  generous,  reckless, 
wasteful  traits  are  all  discernible,  the  same  unaffected  contempt 
for  the  worker,  the  same  class  camaraderie,  often  with  a  special 
code  of  honour,  the  same  sex  license  and  joviality  of  manners. 
Even  their  intelligence  and  humour,  their  very  modes  of  speech, 
are  the  half-imitative,  half-original  replica  of  high  life  as  it  shows 
in  the  race-course,  in  the  club  smoke-room,  or  the  flash  music- 
hall.  Often  the  parasites  and  hangers-on  to  upper-class  sports 
and  recreations,  these  form  a  large  and  growing  class  of  our  pop- 
ulation, and  their  withdrawal  from  all  industry  that  can  be 
termed  productive,  coupled  with  the  debased  mode  of  consump- 
tion which  they  practise,  count  heavily  in  the  aggregate  of  social 
waste. 

§  7.  As  the  opportunities  of  leisure  and  of  some  surplus  income 
beyond  the  current  accepted  standard  of  class  comfort  become 
more  general,  this  sympathetic  imitation  of  recreations,  educa- 
tion and  morals,  undoubtedly  makes  for  a  national  standardisa- 
tion of  life,  though  the  enormous  discrepancies  in  economic  re- 
sources greatly  limit  the  efficacy  of  such  a  tendency  to  unity. 
But  the  apparent  gain  in  humanity  thus  suggested  is  largely 
counterworked  by  the  stronger  sense  of  national  and  especially 
of  racial  cleavage  which  has  come  with  modern  world  intercourse. 
If  class  barriers  of  conduct,  education  and  feeling  are  somewhat 
weakening  in  the  foremost  European  nations,  a  clearer  and  in- 
tenser  realisation  of  national  and  racial  barriers  takes  their 
place.  Every  modification  of  class  exclusiveness,  and  of  eco- 
nomic plunder,  upon  the  smaller  scale,  is  compensated  by  this 
wider  racial  exclusiveness,  with  its  accompanying  parasitism. 
The  civilised  Western  world  is  coming  more  consciously  to  mould 


SPORT,  CULTURE  AND  CHARITY  157 

its  practical  policy,  political  and  economic,  and  its  sentiments 
and  theories,  upon  a  white  exploitation  of  the  lower  and  the  back- 
ward peoples.  Imperialism  is  displacing,  or  at  present  is  crossing, 
class  supremacy,  and  is  evolving  an  intellectualism  and  a  morals 
accommodated  to  the  needs  of  this  new  social  cleavage.  It  is 
moving  towards  a  not  distant  epoch  in  which  Western  white 
nations  may,  as  regards  their  means  of  livelihood,  be  mainly  de- 
pendent upon  the  labour  of  regimented  lower  peoples  in  various 
distant  portions  of  the  globe,  all  or  most  members  of  the  domi- 
nant peoples  enjoying  a  life  of  comparative  pleasure  and  leisure 
and  a  collective  sense  of  personal  superiority  as  the  rulers  of 
the  earth. 

That  standards  of  recreation,  education  and  morals,  thus 
formed  and  transformed,  are  likely  to  contain  enormous  'wastes' 
in  their  direct  and  indirect  bearing  upon  economic  life,  is  ob- 
vious. How  far  this  waste  is  to  be  imputed  to  imitation  of  the 
prestige-possessing  habits  of  'the  leisured  class',  how  far  to 
'original  sin'  or  the  errors  or  excesses  natural  to  all  sorts  and 
conditions  of  men,  it  is  not  possible  to  ascertain.  But  it  will  be 
evident  that  in  these  higher  satisfactions,  to  which  an  increasing 
'surplus'  of  wealth,  leisure  and  energy  can  be  devoted,  will  be 
found  the  largest  wastes.  For  the  conventional  expenditure  em- 
bedded in  these  strata  of  the  various  class  standards  will  be 
largely  directed  by  motives  which  are  very  loosely  related  to 
any  real  standard  of  organic  welfare.  One  need  not  exaggerate 
this  expenditure  of  time  or  money,  or  deem  it  wholly  unproduc- 
tive. It  may  even  be  conceded  that  few  of  the  pursuits  of  pleas- 
ure are  wholly  destitute  of  benefit,  nor  are  prestige  and  the  imi- 
tation it  engenders  wholly  valueless.  But  such  practices  contain 
much  that  is  obsolete,  incongruous  or  indigestible,  much  that  is 
actively  injurious,  both  to  the  individual  and  to  society.  Re- 
garded from  the  standpoint  of  pecuniary  expenditure,  the  mis- 
direction of  the  surplus  income  into  empty  or  depraved  modes 
of  recreation,  culture,  religion  and  charity  is  the  largest  of  all 
economic  wastes.  Could  it  be  set  forth  in  veracious  accounts, 
its  enormity  would  impress  all  reflective  minds.  How  small  the 
total  yield  of  human  welfare  or  even  of  current  pleasurable  sat- 
isfaction from  the  idle  travel,  racing,  hunting,  motoring,  golfing, 


i  S8  WORK  AND  WEALTH 

yachting,  betting  and  gambling,  in  comparison  with  the  human 
gain  from  the  work  and  arts  of  which  they  are  the  futile  substi- 
tutes! Consider  the  damage  to  agriculture,  the  sheer  loss  of 
human  energy,  the  selfishness,  sensuality  and  brutality  inci- 
dental to  many  sports,  the  empty-mindedness,  obtuseness  of 
intelligence  and  insensate  pride,  the  shutting  of  the  senses  and 
the  emotions  to  most  of  the  finer  and  nobler  scenes  in  the  spec- 
tacle of  nature  and  the  drama  of  humanity,  that  are  the  natural 
and  necessary  consequences  of  'a  sporting  life.'  Or  could  one 
accurately  analyse  the  costs  of  dilettantism,  sham  culture,  with 
its  monstrous  perversions  of  productive  energy  in  the  fields  of 
pedagogy,  art,  science,  and  literature,  in  a  descending  scale  of 
frivolousness  or  depravity,  as  they  seize  by  imitation  the  awaken- 
ing mind  of  ever  larger  strata  of  our  populations!  But  even 
worse  than  sham  intellectualism  is  the  sham  morality  which  tricks 
itself  out  in  pietistic  formulas  and  charitable  practices,  so  as  to 
evade  obedience  to  the  plain  laws  of  human  brotherhood  and 
social  justice  in  this  world. 

The  widest  and  deepest  implications  of  this  parasitic  life  of 
luxury  and  leisure,  the  substitution  of  recreation  for  art  and 
exercise,  of  dilettantism  for  the  life  of  thought,  of  pietism,  and 
charity  for  human  fellowship,  lie  beyond  the  scope  of  our  formal 
enquiry.  We  are  concerned  with  them  primarily  as  affecting 
economic  production  and  consumption.  Sport,  dilettantism  and 
charity  are  for  us  characteristic  products  of  mal-distribution  seiz- 
ing that  surplus-income  which  is  the  economic  nutriment  of  social 
progress,  and  applying  it  to  evolve  a  complicated  life  of  futile 
frivolities  for  a  small  leisured  class  who  damage  by  their  conta- 
gious example  and  incitement  the  standards  of  the  working 
members  of  the  society  in  which  they  exercise  dominion. 


CHAPTER  XII 

THE   HUMAN  LAW  OF  DISTRIBUTION 

§  i.  In  seeking  at  once  to  establish  and  apply  to  industry  a 
standard  of  human  value,  we  have  taken  for  our  concrete  subject- 
matter  the  aggregate  of  marketable  goods  and  services  that 
constitute  the  real  income  of  the  nation.  This  real  wealth, 
distributed  in  income  among  the  various  members  of  the  com- 
munity, we  subjected  to  a  double  analysis,  tracing  it  backwards 
through  the  processes  of  its  production,  forward  into  its  consump- 
tion. Some  of  the  activities  of  its  production  we  recognised  as 
being  in  themselves  interesting,  pleasant,  educative  or  other- 
wise organically  useful:  others  we  found  to  be  uninteresting, 
painful,  depressing  or  otherwise  organically  costly.  A  similar 
divergence  of  human  value  appeared  in  the  consumption  of  those 
forms  of  wealth.  Some  sorts  and  quantities  of  consumption  were 
found  conducive  to  the  maintenance  and  furtherance  of  healthy 
life,  both  pleasant  and  profitable.  Other  sorts  and  qualities  of 
consumption  were  found  wasteful  or  injurious  to  the  life  of  the 
consumers  and  of  the  community. 

The  general  result  of  this  double  analysis  may  be  summarised 
in  the  following  tabular  form. 

WEALTH 
PRODUCTION  CONSUMPTION 

Art  &  Exercise.  I  Human  f  Needs. 

Labour.  Utility  [Abundance. 

Toil.  Human  f  Satiety. 

Mai-production.  J  Cost  ( Mai-consumption. 

In  the  ordinary  economic  account  'costs'  appear  entirely  on 
the  Production  side  of  the  account,  'utility'  entirely  on  the  Con- 


160  WORK  AND  WEALTH 

sumption  side.  Production  is  regarded  not  as  good  or  desirable 
in  itself,  but  only  as  a  means  towards  an  end,  Consumption. 
On  the  other  hand,  all  parts  of  Consumption  are  regarded  as  in 
themselves  desirable  and  good,  and  are  assessed  as  Utilities  ac- 
cording to  the  worth  which  current  desires,  expressed  in  pur- 
chasing power,  set  upon  them. 

Our  human  valuation  refuses  to  regard  work  as  a  mere  means 
to  consumption.  It  finds  life  arid  welfare  in  the  healthy  func- 
tioning of  productive  activities,  as  well  as  in  the  processes  of 
repair  and  growth  which  form  sound  consumption. 

If  all  production  could  be  reduced  to  Art  and  Exercise,  the 
creative  and  the  re-creative  functions,  all  consumption  to  the 
satisfaction  of  physical  and  spiritual  needs,  we  should  appear  to 
have  reached  an  ideal  economy,  in  which  there  would  be  no  hu- 
man costs  and  a  maximum  amount  of  human  utility.  The  con- 
ditions of  a  complete  individual  life  would  seem  to  be  attained. 
But  we  are  not  concerned  with  a  society  in  which  completeness 
of  the  individual  life  is  the  sole  end,  but  with  a  society  in  which 
the  desires,  purposes  and  welfare  of  the  individuals  are  com- 
prised in  the  achievement  of  a  common  life.  For  this  reason  I 
have  included  under  the  head  of  Utility  on  the  Productive  side 
of  our  account,  not  only  the  Art  and  Exercise  which  are  directly 
conducive  to  individual  well-being,  but  a  quantum  of  Labour 
which  represents  the  economic  measure  of  the  inter-dependency, 
or  solidarity,  of  the  so-called  individuals.  Such  labour  is  the 
so-called  'sacrifice'  required  of  'individuals'  in  the  interest  of 
the  society  to  which  they  belong.  To  the  individualist  it  ap- 
pears a  distortion  of  the  free  full  development  of  his  nature,  an 
interference  with  his  perfect  life.  But  it  is,  of  course,  neither 
sacrifice  nor  distortion.  For  the  so-called  individual  is  nowise, 
except  in  physical  structure,1  completely  divided  from  his  fel- 
lows. He  is  a  social  being  and  this  social  nature  demands  recog- 
nition and  expression  in  economic  processes.  It  requires  him  to 
engage  in  some  special  work  which  has  for  its  direct  end  the  wel- 

1  Even  there  he  is  not  separated  in  physical  functions.  The  sexual,  philoprogeni- 
tive, and  the  gregarious  instincts,  which  are  rooted  in  physical  structure,  negate 
physical  individualism.  So  does  the  structure  of  his  brain,  which  in  solitude  decays 
or  becomes  diseased. 


THE  HUMAN  LAW  OF  DISTRIBUTION  161 

fare  of  society,  In  addition  to  the  work  of  using  his  own  powers 
for  his  own  personal  ends.  How  far  this  routine  labour  for  so- 
ciety can  be  taken  into  his  conception  of  his  human  nature,  and 
so  become  a  source  of  personal  satisfaction,  is  a  question  we  shall 
discuss  later  on.  At  present  it  will  suffice  to  recognise  that  each 
man's  fair  contribution  to  the  routine  labour  of  the  world,  though 
irksome  to  him,  is  not  injurious  but  serviceable  to  his  'human' 
nature.  Thus  interpreted,  it  stands  on  the  utility,  not  on  the 
cost,  side  of  the  account.  It  must  be  distinguished  from  its  ex- 
cess, which  we  here  term  'toil',  and  from  work,  which  whether 
from  an  abuse  of  the  creative  faculty  or  of  social  control,  is  bad 
and  degrading  in  its  nature  and  is  here  termed  mal-production. 

A  similar  distinction  between  the  narrowly  personal  and  the 
broader  social  interpretation  of  welfare  is  applicable  on  the  con- 
sumption side.  It  is  clearly  not  enough  that  the  income  which 
is  to  furnish  consumption  should  suffice  only  to  make  provision 
for  the  satisfaction  "of  the  material  and  spiritual  needs  of  the  in- 
dividual— or  even  of  his  family.  The  expenditure  of  every  man 
should  contain  a  margin — which  I  here  call  'abundance' — from 
which  he  may  contribute  voluntarily  to  the  good  of  others.  There 
will  be  public  needs  or  emergencies,  which  are  not  properly 
covered  by  State  services  but  remain  a  call  upon  the  public 
spirit  of  persons  of  discernment  and  humanity.  There  are  also 
the  calls  of  hospitality  and  comradeship,  and  the  wider  claim  of 
charity,  the  willing  help  to  those  in  need,  a  charity  that  is  spon- 
taneous, not  organised,  that  degrades  neither  him  who  gives  nor 
him  who  receives,  because  it  is  the  natural  expression  of  a  spirit 
of  human  brotherhood.  For  the  sting  alike  of  condescension 
and  of  degradation  would  be  removed  from  charity,  when  both 
parties  feel  that  such  acts  of  giving  are  an  agreeable  expression 
of  a  spirit  of  fellowship.  From  the  consumption  which  is  thus 
applied  to  the  satisfaction  of  sound  personal  needs,  or  which 
overflows  hi  'abundance'  to  meet  the  needs  of  others,  we  dis- 
tinguish sharply  that  excessive  quantity  of  consumption,  which 
in  our  Table  ranks  as  'Satiety',  and  those  base  modes  of  con- 
sumption which  in  their  poisonous  reactions  on  personal  and 
social  welfare  strictly  correspond  to  the  base  forms  of  production. 

§  2.  Such  are  the  general  lines  of  demarcation  between  the 


162  WORK  AND  WEALTH 

strictly  business  and  the  human  valuation  of  the  productive  and 
consumptive  processes.  We  now  perceive  how  close  is  the  re- 
semblance of  the  laws  of  human  valuation  as  applied  to  the  two 
sides  of  the  equation  of  Wealth.  This  similarity  is,  of  course, 
no  chance  coincidence:  it  inheres  in  the  organic  nature  of  so- 
ciety and  of  individual  life.  But,  in  order  to  proceed  with  our 
main  purpose,  the  expression  of  the  economic  income  in  terms 
of  human  income,  we  must  bring  the  two  sides  of  the  enquiry 
into  closer  union.  We  can  thus  get  a  fair  survey  of  the  current 
life  of  industry  from  the  standpoint  of  wealth  and  waste,  health 
and  disease.  So  far  as  our  national  income,  the  £2,000,000,000 
of  goods  and  services,  are  produced  by  activities,  which  in  their 
nature  and  distribution  can  be  classed  as  Art,  Exercise  and  Social 
Labour,  and  are  consumed  in  ways  conducive  to  the  satisfac- 
tion of  individual  and  social  Needs,  our  industrial  society  is 
sound. 

Probably  the  greater  part  of  our  income  is  thus  made  and 
spent.  The  necessity  of  attending  more  closely  to  the  defects 
than  to  the  successes  of  the  present  system  must  not  lead  us  to 
disparage  the  latter. 

If  industry  were  in  fact  the  irrational,  unjust  and  utterly  in- 
human anarchy  it  is  sometimes  represented  to  be,  it  would  not 
hold  together  for  twenty-four  hours.  Not  merely  is  the  individ- 
ual business  in  its  normal  state  a  finely  adjusted,  accurately- 
working  complex  of  human  skill,  industry  and  cooperative  good- 
will, but  the  larger  and  less  centralised  structures,  which  we  call 
trades  and  markets,  show  a  wonderful  intricacy  of  order  in  their 
form  and  working.  To  feed  the  thousands  of  mills  and  workshops 
of  England  with  a  fairly  regular  supply  of  countless  materials 
drawn  from  the  wide  world,  to  feed  the  millions  of  mouths  of 
our  people  with  their  regular  supply  of  daily  food,  are  notable 
achievements  of  industrial  order.  In  concentrating,  as  we  must, 
our  chief  thought  upon  the  disorder  of  the  system,  the  places 
where  it  fails,  and  the  damage  of  such  failure,  we  gain  nothing 
by  exaggerating  the  industrial  maladies  and  their  social  injuries. 

The  proportions  of  order  and  disorder,  health  and  disease, 
human  cost  and  human  utility,  in  the  working  of  our  industrial 
system  are  best  ascertained  by  turning  once  more  to  our  con- 


THE  HUMAN  LAW  OF  DISTRIBUTION  163 

crete  mass  of  wealth,  our  income,  and  enquiring  into  the  quantita- 
tive method  of  its  distribution. 

In  examining  the  human  costs  involved  in  a  given  output  of 
labour-power  (and  of  other  productive  energy)  we  recognised 
that  very  much  depended  upon  the  conditions  of  that  output,  and 
particularly  upon  the  length  and  intensity  of  the  working-day 
and  working-week. 

Similarly,  in  examining  the  human  utility  got  from  the  con- 
sumption of  a  given  quantity  of  goods,  we  recognised  that  it  will 
depend  upon  the  sort  and  the  number  of  persons  who  receive  it 
for  consumption. 

So  from  both  sides  of  the  question  we  approach  the  central 
issue  of  the  distribution  of  Wealth. 

If  the  £2,000,000,000  of  goods  were  found  to  be  so  distributed 
in  the  modes  of  their  production  as  to  involve  no  burden  of  toil 
and  no  injury  upon  the  producers,  while  they  were  so  distributed 
in  income  as  to  involve  no  waste  or  damage  in  consumption,  the 
human  utility  it  represented  would  reach  a  maximum  and  cost 
would  be  zero. 

If,  on  the  other  hand,  the  same  goods  were  largely  produced 
by  ill-nourished  labourers,  working  long  hours  under  bad  hy- 
gienic conditions,  and  using  capital  largely  furnished  by  the  pain- 
ful and  injurious  saving  of  the  poor,  while  the  distribution  of 
the  goods  was  such  as  to  assign  the  bulk  of  them  to  a  small  af- 
fluent class,  the  masses  living  on  a  bare  subsistence  level,  the 
human  utility  of  such  a  system  would  be  very  small,  its  human 
cost  very  great.  Judged  indeed  from  any  right  standard  of 
civilisation,  an  industrial  society  of  the  latter  sort  might  repre- 
sent a  minus  quantity  of  human  welfare. 

There  might  even  be  two  nations  of  equal  population  and 
economic  income,  equally  prosperous  from  the  standpoint  of 
statistics  of  commerce,  which  nevertheless,  by  reason  of  the 
different  apportionment  of  work  and  income,  stood  poles  asunder 
in  every  true  count  of  human  prosperity. 

§  3.  Now  the  Human  Law  of  Distribution,  in  its  application  to 
industry,  aims,  as  we  have  seen,  to  distribute  Wealth,  in  relation 
to  its  production  on  the  one  hand  and  its  consumption  on  the 
other,  so  as  to  secure  the  minimum  of  Human  Costs  and  the  max- 


164  WORK  AND  WEALTH; 

imum  of  Human  Utility.  No  bare  rule  of  absolute  equality, 
based  upon  the  doctrine  of  equal  rights,  equal  powers  or  equal 
needs,  will  conduce  to  this  result.  The  notion  that  the  claims 
of  justice  or  humanity  would  be  met  by  requiring  from  all  per- 
sons an  equal  contribution  to  the  general  output  of  productive 
energy  is  manifestly  foolish  and  impracticable.  To  require  the 
same  output  of  energy  from  a  strong  as  from  a  weak  man,  from 
an  old  as  from  a  young,  from  a  woman  as  from  a  man,  to  ignore 
those  actual  differences  of  age,  sex,  health,  strength  and  skill, 
would  be  rejected  at  once  as  a  preposterous  application  of  human 
equality.  If  such  an  equal  output  were  required,  it  could  only 
be  obtained  by  an  average  task  which  would  unduly  tax  the 
powers  of  the  weak,  and  would  waste  much  of  the  powers  of 
the  strong.  A  similar  human  economy  holds  of  the  provision 
of  capital  through  saving.  To  impose  saving  upon  working  folk 
whose  income  barely  maintains  the  family  efficiency,  when  other 
folk  possess  surplus-incomes  out  of  which  the  socially  necessary 
capital  can  be  provided,  is  a  manifestly  wasteful  policy.  Those 
who  have  no  true  power  to  save  should  not  be  called  upon  to 
undergo  this  'cost':  all  saving  should  come  proportionately  out 
of  higher  incomes  where  it  involves  no  human  sacrifice.  Alike, 
as  regards  labour  and  capital,  the  true  social  economy  is  ex- 
pressed in  the  principle  that  each  should  contribute  hi  accord- 
ance with  his  ability. 

It  should  be  similarly  evident  that  exact  equality  of  incomes 
in  money  or  in  goods  for  all  persons  is  not  less  wasteful,  or  less 
socially  injurious.  I  cannot  profess  to  understand  by  what  rea- 
soning some  so-called  Socialists  defend  an  ideal  order  in  which 
every  member  of  society,  man,  woman  and  child,  should  have 
an  absolutely  equal  share  of  the  general  income.  The  needs  of 
people,  their  capacity  to  get  utility  out  of  incomes  by  consuming 
it,  are  no  more  equal  than  their  powers  of  production.  Neither 
in  respect  of  food,  or  clothing,  or  the  general  material  standard 
of  comfort,  can  any  such  equality  of  needs  be  alleged.  To  say 
that  a  big  strong  man,  giving  out  a  correspondingly  large  output 
of  energy,  needs  exactly  the  same  supply  of  food  as  a  small 
weakly  man,  whose  output  is  a  third  as  great,  would  be  as  ridicu- 
lous as  to  pretend  that  a  fifty-horse  power  engine  needed  no 


THE  HUMAN  LAW  OF  DISTRIBUTION  165 

more  fuel  than  a  ten-horse  power  one.  Nor  will  the  differences 
in  one  set  of  needs  be  closely  compensated  in  another.  Mankind 
is  not  equal  in  the  sense  that  all  persons  have  the  same  number 
of  faculties  developed,  or  capable  of  development,  to  the  same 
extent,  and  demanding  the  same  aggregate  amount  of  nutriment. 
To  maintain  certain  orders  of  productive  efficiency  will  demand 
a  much  larger  consumption  than  to  maintain  others.  Because 
differences  of  income  and  expenditure  exist  at  present  which  are 
manifestly  unjust  and  injurious,  that  is  no  reason  for  insisting 
that  all  differences  are  unwarrantable.  Equality  of  opportu- 
nity does  not  imply  equality  but  some  inequality  of  incomes. 
For  opportunity  does  not  consist  in  the  mere  presence  of  some- 
thing which  a  man  can  use,  irrespective  of  his  own  desires  and 
capacities.  A  banquet  does  not  present  the  same  amount  of 
opportunity  to  a  full  man  as  to  a  hungry  man,  to  an  invalid  as 
to  a  robust  digestion.  £1,000,  spent  in  library  equipment  for 
university  students,  represents  far  more  effective  opportunity 
than  the  same  sum  spent  on  library  equipment  in  a  community 
where  few  can  read  or  care  to  read  any  book  worth  reading. 
Equality  of  opportunity  involves  the  distribution  of  income  ac- 
cording to  capacity  to  use  it,  and  to  assume  an  absolute  equality 
of  such  capacity  is  absurd. 

It  may  no  doubt  be  urged  that  it  is  difficult  to  measure  in- 
dividual needs  and  capacities  so  as  to  apply  the  true  organic 
mode  of  distribution.  This  is  true  and  any  practical  rules  for 
adjusting  income,  or  for  distribution  of  the  product,  according 
to  needs,  will  be  likely  to  involve  some  waste.  But  that  is  no 
reason  for  adopting  a  principle  of  distribution  which  must  in- 
volve great  waste.  However  difficult  it  may  be  to  discover  and 
estimate  differences  of  needs  in  individuals  or  classes  of  men,  to 
ignore  all  differences  insures  a  maximum  of  waste.  For,  assum- 
ing, as  it  does,  a  single  average  or  standard  man,  to  which  type 
no  actual  man  conforms,  it  involves  a  necessary  waste  in  each 
particular  case.  Everyone,  in  a  word,  would  under  this  mechan- 
ical interpretation  of  equality  possess  either  a  larger  or  a  smaller 
income  than  he  could  use.  Such  a  doctrine,  though  sometimes 
preached  by  persons  who  call  themselves  socialists,  is  really  a 
survival  of  the  eighteenth-century  doctrine  of  individual  rights, 


166  WORK  AND  WEALTH 

grafted  on  to  a  theory  of  the  uniformity  of  human  nature  that 
is  contradicted  by  the  entire  trend  of  science. 

This  levelling  doctrine  only  serves  to  buttress  the  existing 
forms  of  inequality,  by  presenting  in  the  guise  of  reform  a  spu- 
rious equality,  the  folly  and  the  waste  of  which  are  obvious  even 
to  the  least  reflecting  of  mankind. 

§  4.  Distribution  of  income  according  to  needs,  or  ability  to 
use  it,  does  not,  indeed,  depend  for  its  practical  validity  upon 
the  application  of  exact  and  direct  measurements  of  needs.  The 
limits  of  any  sort  of  direct  measurement  even  of  material  needs 
appear  in  any  discussion  of  the  science  of  dietetics.  But  inexact 
though  such  science  is,  it  can  furnish  certain  valid  reasons  for 
different  standards  of  food  in  different  occupations,  and  for  other 
discriminations  relating  to  race,  age,  sex  and  vigour.  What 
holds  of  food  will  also  hold  of  housing,  leisure,  modes  of  recrea- 
tion and  intellectual  consumption.  Nor  must  it  be  forgotten 
that,  for  expenditure,  the  family  is  the  true  unit.  The  size  and 
age  of  the  family  is  certainly  a  relevant  factor  in  estimating  needs, 
and  in  any  distribution  on  a  needs  basis  must  be  taken  into  ac- 
count. 

Public  bodies,  and  less  commonly  private  forms,  in  fixing  sal- 
aries and  wages,  are  consciously  guided  by  such  considerations. 
The  idea  is  to  ascertain  the  sum  which  will  maintain  a  worker, 
with  or  without  a  family,  in  accordance  with  economic  efficiency, 
and  having  regard  to  the  accepted  conventions  of  the  class  from 
which  he  will  be  drawn.  Having  determined  this  'proper'  salary 
or  wage,  they  seek  to  get  the  best  man  for  the  work.  It  is  true 
that  the  conventional  factor  looms  so  big  in  this  process  as  often 
to  obscure  the  natural  economy.  When  it  is  determined  by  a 
municipality  that  its  Town  Clerk  ought  to  have  £1500  a  year 
and  its  dustman  225.  a  week,  it  appears  a  palpable  straining  of 
language  to  suggest  that  differences  of  'needs'  correspond  to 
this  discrepancy  of  pay.  For,  though  it  is  true  that  in  the  ex- 
isting state  of  the  market  for  legal  ability  and  experience  the 
town  may  not  be  able  to  get  a  really  good  town  clerk  for  less, 
that  state  of  the  legal  market  is  itself  the  result  of  artificial  re- 
strictions in  opportunity  of  education  and  of  competition,  which 
have  no  natural  basis  and  which  a  society  versed  in  sound  social 


THE  HUMAN  LAW  OF  DISTRIBUTION  167 

economy  will  alter.  But  the  fact  that  the  existing  interpretation 
of  needs  is  frequently  artificial  and  exaggerated  must  not  lead 
us  to  ignore  the  element  of  truth  embodied  in  it.  The  wages  of 
policemen,  the  real  wages  of  soldiers  and  sailors,  are  determined 
with  conscious  relation  to  the  needs  of  able-bodied  men  engaged 
in  hard  physical  work,  and  with  some  regard  to  the  existence  of 
a  wife  and  family.  But  I  need  not  labour  the  point  of  the  dif- 
ference between  the  salary  and  the  'commodity'  view  of  labour. 
The  acceptance  among  all  thoughtful  employers  of  '  the  economy 
of  high  wages '  applied  within  reasonable  limits  is  itself  the  plain- 
est testimony  to  the  actuality  of  the  'needs'  basis  of  income. 
That  unless  you  pay  a  man  enough  to  satisfy  his  needs,  you  can- 
not get  from  him  his  full  power  of  work,  is  a  proposition  which 
would  meet  with  universal  acceptance. 

But  it  will  commonly  be  added  that  the  safest  way  of  measur- 
ing needs  is  by  means  of  output.  This  output,  measured  by 
work-time,  or  by  piece,  or  by  a  combination  of  the  two,  still  re- 
mains the  general  basis  of  payment.  How  far  is  this  conform- 
able to  our  theory  of  human  distribution,  according  to  needs? 
That  there  is  some  conformity  will,  I  think,  be  easily  perceived. 
If  one  docker  unloads  twice  as  much  grain  or  timber  as  another 
docker  in  the  same  time,  or  if  one  hewer  working  under  the  same 
conditions  'gets'  twice  as  much  coal  as  another,  there  is  a  reason- 
able presumption  that  the  larger  actual  quantity  of  labour  has 
taken  a  good  deal  more  '  out  of  him '. 

Putting  the  comparison  on  its  barest  physical  basis,  there  has 
been  a  larger  expenditure  of  tissue  and  of  energy,  which  must 
be  replaced  by  a  larger  consumption  of  food.  A  strong  man 
doing  much  work  may  not  be  exerting  himself  more  than  a  weak 
man  doing  little  work.  But  all  the  same  there  is  some  propor- 
tion between  the  respective  values  of  their  output  of  physical 
energy  and  their  intake  of  food.  This,  of  course,  is  a  purely 
physiological  application  of  our  law  of  human  distribution.  It 
applies  both  to  sorts  of  work  and  to  individual  cases  in  the  same 
sort  of  work,  and  constitutes  an  'organic'  basis  for  difference  of 
'class'  wages  and  individual  wages.  We  urge  that  it  is  appli- 
cable to  other  factors  of  consumption  than  food,  and  throughout 
the  whole  area  of  production  and  consumption.  But  applied  as 


i68  WORK  AND  WEALTH 

a  practical  principle  for  determining  distinctions  of  class  or 
grade  payment,  and  still  more  for  individual  payment  within  a 
class,  it  has  a  very  limited  validity.  Rigorously  applied  it  is 
the  pure  'commodity'  view  of  labour,  the  antithesis  of  the  'sal- 
ary' view  which  best  expresses  the  'needs'  economy.  But, 
though  output  cannot  be  taken  as  an  accurate  measure  of  'needs' 
for  the  purpose  of  remuneration,  it  clearly  ought  to  be  taken 
into  account.  The  practical  reformer  will  indeed  rightly  insist 
that  it  must  be  taken  into  account.  For  he  will  point  out  that 
output  is  a  question  not  merely  of  physiological  but  still  more  of 
moral  stimulus.  A  strong  man  will  not  put  out  more  productive 
energy  than  his  weaker  fellow  unless  he  knows  he  is  to  get  more 
pay;  a  skilful  man  cannot  be  relied  upon  to  use  his  full  skill  un- 
less he  personally  gains  by  doing  so.  If  the  sense  of  social  ser- 
vice were  stronger  than  it  is,  a  bonus  for  extra  strength  or  skill 
might  be  unnecessary.  But  as  human  nature  actually  stands, 
this  stimulus  to  do  a  'best'  that  is  better  than  the  average,  must 
be  regarded  as  a  moral  'need'  to  be  counted  for  purposes  of  re- 
muneration along  with  the  physiological  needs.  Too  much  need 
not  be  made  of  this  distinctively  selfish  factor.  In  many  sorts 
of  work,  indeed,  it  may  not  be  large  enough  to  claim  recognition 
in  remuneration.  But  where  it  is  important,  the  application  of 
our  needs  economy  of  distribution  must  provide  for  it.  This  ad- 
mission does  not  in  the  least  invalidate  our  organic  law.  For  the 
moral  nature  of  a  man  is  as  'natural'  as  his  physical  nature. 
Both  are  amenable  to  education,  and  with  education  will  come 
changes  which  will  have  their  just  reactions  upon  the  policy  of 
remuneration. 

§  5.  The  organic  law  of  distribution  in  regarding  needs  will, 
therefore,  take  as  full  an  account  as  it  can  both  of  the  unity  and 
the  diversity  of  human  nature.  The  recognition  of  'common' 
humanity  will  carry  an  adequate  provision  of  food,  shelter, 
health,  education  and  other  prime  necessaries  of  life,  so  as  to 
yield  equal  satisfaction  of  such  requirements  to  all  members  of 
the  community.  This  minimum  standard  of  life  will  be  substan- 
tially the  same  for  all  adult  persons,  and  for  all  families  of  equal 
size  and  age.  Upon  this  standard  of  human  uniformity  will  be 
erected  certain  differences  of  distribution,  adjusted  to  the  spe- 


THE  HUMAN  LAW  OF  DISTRIBUTION  169 

cific  needs  of  any  class  or  group  whose  work  or  physical  conditions 
marks  it  out  as  different  from  others.  The  present  inequalities 
of  income,  so  largely  based  upon  conventional  or  traditional 
claims,  would  find  little  or  no  support  under  this  application  of 
the  organic  law.  Indeed,  it  seems  unlikely  that  any  specific  re- 
quirements of  industrial  or  professional  life  would  bulk  so  largely 
in  interpreting  human  needs  as  to  warrant  any  wide  discrimina- 
tion of  incomes.  There  seems  no  reason  to  maintain  that  a 
lawyer's  or  a  doctor's  family  would  require,  or  could  advanta- 
geously spend,  a  larger  income  than  a  bricklayer's,  in  a  society 
where  equality  of  educational  and  other  opportunities  obtained. 
But,  if  there  were  any  sorts  of  work  which,  by  reason  of  the  spe- 
cial calls  they  made  upon  human  faculties,  or  of  the  special  condi- 
tions they  imposed,  required  an  expenditure  out  of  the  common, 
the  organic  law  of  distribution  according  to  needs  would  make 
provision  for  the  same  as  an  addition  to  the  standard  minimum. 
So  likewise  the  hours  of  labour  would  be  varied  from  a  standard 
working-day  to  meet  the  case  of  work  unusually  intense  or  wear- 
ing in  its  incidence.  To  what  extent  society  would  find  it  nec- 
essary to  recognise  individual  differences  of  efficiency  within  each 
grade  as  a  ground  for  particular  remuneration — and  how  far 
such  claims  would  represent,  not  payment  according  to  true 
needs  but  power  to  extort  a  personal  rent — is  a  question  which 
can  only  be  answered  by  experience.  It  may,  however,  be  re- 
garded as  certain  that  the  high  individual  rents  which  prevail 
at  present  in  skilled  manual  and  mental  work,  could  not  be 
maintained.  For  these  high  rates  depend  upon  conditions  of 
supply  and  of  demand  which  would  not  then  exist.  The  enor- 
mous fees  which  specialists  of  repute  in  the  law  or  medicine  can 
obtain  depend,  partly,  upon  the  inequality  of  educational  and 
social  opportunities  that  limits  the  supply  of  able  men  in  these 
professions;  partly,  upon  other  inequalities  of  income  that  en- 
able certain  persons  to  afford  to  pay  such  fees.  Equality  of 
opportunity  and  even  an  approximate  equalisation  of  income 
would  destroy  both  these  sources  of  high  rents  of  ability.  What 
applies  in  the  professions  would  apply  in  every  trade.  Individ- 
ual 'rents'  of  ability  might  survive,  but  they  must  be  brought 
within  a  narrow  compass. 


i7o  WORK  AND  WEALTH 

While,  then,  the  selfishness  of  individual  man  might  give  a 
slight  twist  to  the  application  of  the  social  policy  of  distribution 
according  to  needs,  it  would  not  impair  its  substantial  validity 
and  practicability. 

Thus  we  see  this  law  of  distribution,  operative  as  a  purely 
physical  economy  in  the  apportionment  of  energy  for  mechan- 
ical work,  operative  as  a  biological  economy  through  the  whole 
range  of  organic  life,  is  strictly  applicable  as  a  principle  of  social 
economy.  Its  proper  application  to  social  industry  would  en- 
able that  system  to  function  economically,  so  as  to  produce  the 
maximum  of  human  utility  with  the  minimum  of  human  cost. 

§  6.  If  we  can  get  an  industrial  order,  in  which  every  person 
is  induced  to  discover  and  apply  to  the  service  of  society  his 
best  abilities  of  body  and  mind,  while  he  receives  from  society 
what  is  required  to  sustain  and  to  develop  those  abilities,  and 
so  to  live  the  best  and  fullest  life  of  which  he  is  capable,  we  have 
evidently  reached  a  formally  sound  solution  of  the  social  problem 
on  its  economic  side.  We  are  now  in  a  position  to  approach  the 
actual  processes  of  economic  distribution  that  prevail  to-day, 
so  as  to  consider  how  far  they  conform  to  this  sound  principle 
of  human  industry. 

We  are  not  justified  at  the  outset  in  assuming  that  any  wide 
discrepancy  will  be  admitted.  On  the  contrary,  in  many  quar- 
ters there  survives  a  firm  conviction  that  our  actual  system  of 
industry  does  work  in  substantial  conformity  with  the  human 
law  of  distribution. 

The  so-called  laissez-faire  theory  of  industrialism  based  its 
claims  to  utility  and  equity  upon  an  assertion  of  the  virtual 
identity  of  the  economic  and  the  human  distribution.  If  every 
owner  of  capital  or  labour  or  any  other  factor  of  production  were 
free  to  apply  his  factor  in  any  industry  and  any  place  he  chose, 
he  would  choose  that  industry  and  that  place  where  the  highest 
remuneration  for  its  employment  was  attainable.  But  since  all 
remuneration  for  the  factors  of  production  is  derived  from  the 
product  itself,  which  is  distributed  among  the  owners  of  the  sev- 
eral factors,  it  follows  that  the  highest  remuneration  must  al- 
ways imply  the  most  productive  use.  Thus,  by  securing  com- 
plete mobility  of  capital  and  labour,  we  ensure  both  a  maximum 


THE  HUMAN  LAW  OF  DISTRIBUTION  171 

production  and  an  equitable  distribution.  'Led  as  by  an  in- 
visible hand, '  every  owner  of  capital,  labour  or  other  productive 
power,  disposed  of  his  factor  in  a  manner  at  once  most  service- 
able to  the  production  of  the  general  body  of  wealth  and  most 
profitable  to  himself.  The  application  of  this  theory,  of  course, 
assumed  that  everybody  knew  or  could  get  to  know  what  em- 
ployment he  would  be  likely  to  find  most  profitable  for  his  capi- 
tal or  labour,  and  would  use  that  knowledge.  It  was,  moreover, 
held  that  the  actual  conditions  of  industry  and  commerce  did 
and  must  substantially  conform  to  this  hypothesis  of  mobility. 
Any  circumstances,  indeed,  which  contravened  it  by  obstruct- 
ing the  mobility  and  liberty  of  employment  were  treated  as 
exceptional.  Such  exceptions  were  monopolies,  the  exclusive 
owners  of  which  forbade  freedom  of  entry  or  of  competition  to 
outside  capital  and  labour,  and  secured  higher  rates  of  profit 
than  prevailed  in  other  businesses.  The  harmony  of  perfect  in- 
dividualism demanded  that  all  such  monopolies,  together  with 
protective  duties  and  other  barriers  to  complete  liberty  of  com- 
merce and  of  industry,  should  be  removed.  All  productive  power 
would  then  flow  like  water  through  the  various  industrial  chan- 
nels, maintaining  a  uniform  level  of  efficient  employment,  the 
product  being  distributed  in  accordance  with  the  several  costs 
of  its  production  and  being  absorbed  in  the  processes  of  produc- 
tive consumption  that  were  required  to  maintain  the  current 
volume  of  productive  power  or  to  enhance  it. 

There  was  a  little  difficulty  in  the  case  of  rents  of  land.  Though 
differential  rents,  measuring  the  superior  productivity  of  various 
grades  of  land  as  compared  with  the  least  productive  land  in  use, 
were  necessary  payments  to  landowners,  they  could  not  rank  as 
costs  and  could  not  be  productively  consumed.  So  likewise  with 
the  scarcity  rents,  paid  even  for  the  least  productive  lands  where 
the  supply  for  certain  uses  was  restricted.  Both  scarcity  and 
differential  rents  were  classed  as  surplus.  But  though  the  mag- 
nitude of  this  exceptional  element  might  seem  to  have  been  a 
fatal  flaw  in  the  individualist  harmony,  a  characteristic  mode  of 
escape  was  found  in  the  doctrine  of  parsimony  which  prevailed. 
Though  economic  rents  could  not  be  productively  consumed  by 
their  recipients,  they  furnished  a  natural  fund  of  savings,  so  pro- 


i;2  WORK  AND  WEALTH 

viding  the  growing  volume  of  new  capital  which  was  necessary 
to  set  labour  to  productive  work.  So,  by  a  somewhat  liberal 
interpretation,  it  was  contended  that  'the  simple  system  of 
natural  liberty',  even  operating  on  a  basis  of  private  ownership 
of  land,  drew  from  each  man  the  best  and  fullest  use  of  his  pro- 
ductive powers,  and  paid  him  what  was  economically  necessary 
to  maintain  and  to  evoke  those  powers.  Early  critics  of  this 
theory,  of  course,  pointed  out  that  the  interpretation  of  distribu- 
tion 'according  to  needs'  was  defective  from  the  standpoint  of 
humanity,  since  the  only  needs  taken  into  account  were  effi- 
ciency for  productive  work,  the  nourishment  and  stimulus  to 
produce  a  larger  quantity  of  marketable  goods,  not  the  attain- 
ment of  the  highest  standard  of  human  well-being.  But  to  most 
economists  of  that  day  such  a  criticism  seemed  unmeaning,  so 
dominant  in  their  minds  was  the  conception  of  economic  wealth 
as  the  index  and  the  instrument  of  human  welfare. 

§  7.  It  is  commonly  asserted  and  assumed  that  this  laissez- 
faire  theory  is  dead,  and  that  the  attainment  of  a  harmony  of 
social  welfare,  by  the  free  intelligent  play  of  individual  self- 
interest  in  the  direction  of  economic  forces,  has  been  displaced 
by  some  theory  of  conscious  cooperative  or  corporate  direction 
in  which  the  State  takes  a  leading  part.  But  at  this  very  time, 
when  the  policy  of  every  civilised  nation  is  engaged  more  and 
more  in  checking  monopolies  and  industrial  privileges  upon  the 
one  hand,  and  in  placing  restraints  upon  the  havoc  of  unfettered 
competition  on  the  other,  a  distinct  and  powerful  revival  of  an 
economic  theory  of  production  and  distribution  undistinguish- 
able  in  its  essentials  from  the  crude  i8th  century  laissez-faire 
has  set  in.  Largely  influenced  by  the  desire  to  apply  mathemat- 
ics, so  as  to  secure  a  place  for  economics  as  an  'exact'  science, 
many  English  and  American  economists  have  committed  them- 
selves to  a  'marginalist'  doctrine,  which  for  its  efficiency  rests 
upon  assumptions  of  infinite  divisibility  of  the  factors  of  produc- 
tion, and  frictionless  mobility  of  their  flow  into  all  the  channels 
of  industry  and  commerce.  These  assumptions  granted,  capital 
and  labour  flow  into  all  employments  until  the  last  drop  in  each 
is  equally  productive,  the  products  of  the  'marginal'  or  final 
drops  exchanging  on  a  basis  of  absolute  equality  and  earning 


THE  HUMAN  LAW  OF  DISTRIBUTION  173 

for  their  owners  an  equal  payment.  Among  English  economists 
Mr.  Wicksteed  has  set  out  this  doctrine  in  all  its  economic  ap- 
plications most  fully.  He  shows  how  by  a  delicate  balance  of 
preferences  'at  the  margins'  i.  e.  in  reference  to  the  last  portion 
of  each  supply  of  or  demand  for  anything  that  is  bought  or  sold, 
there  must  be  brought  about  an  exact  equivalence  of  utility,  of 
worth,  and  of  remuneration,  for  the  marginal  increments  in  all 
employment.  '  So  far  as  the  economic  forces  work  without  fric- 
tion, they  secure  to  everyone  the  equivalent  of  his  industrial 
significance  at  the  part  of  the  industrial  organism  at  which  he 
is  placed.' *  Elsewhere  2  he  asseverates  that,  as  regards  the 
workers  hi  any  employment,  this  means  that  'they  are  already 
getting  as  much  as  their  work  is  worth,'  and  that  if  they  are  to 
get  more,  this  'more'  can  only  be  got  either  out  of  'communal 
funds,'  or  by  making  their  work  worth  more.  The  same  ap- 
plication of  the  marginalist  doctrine  is  made  by  Professor  Chap- 
man. 'The  theory,  then,  merely  declares  that  each  person  will 
tend  to  receive  as  his  wage  his  value — that  is,  the  value  of  this 
marginal  product — no  more  and  no  less.  In  order  to  get  more 
than  he  actually  does  get,  he  must  become  more  valuable, — work 
harder,  for  instance — that  is,  he  must  add  more  to  the  product 
in  which  he  participated.' 3  This  is  precisely  the  old  'laissez- 
faire,  laissez-aller '  teaching,  fortified  by  the  conception  that  some 
special  virtue  attaches  to  the  equalising  process  which  goes  on 
'  at  the  margin '  of  each  employment  of  the  factors  of  production. 
The  'law  of  distribution'  which  emerges  is  that  every  owner 
of  any  factor  of  production  'tends  to  receive  as  remuneration' 
exactly  what  it  is  'worth'.  Now  this  'law'  is  doubly  defective. 
Its  first  defect  arises  from  the  fact  that  economic  science  assigns 
no  other  meaning  to  the  'worth'  or  'value'  of  anything  than  what 
it  actually  gets  hi  the  market.  To  say,  therefore,  that  anybody 
'gets  what  he  is  worth',  is  merely  an  identical  proposition,  and 
conveys  no  knowledge.  The  second  defect  is  the  reliance  upon 
a  '  tendency '  which  falsely  represents  the  normal  facts  and  forces. 
It  is  false  in  three  respects.  It  assumes  in  the  first  place  an  in- 
finite divisibility  of  the  several  factors,  necessary  to  secure  the 

1  The  Comtnon-sense  of  Political  Economy,  p.  698. 

2  P.  345-  3  Work  and  Wages,  Vol.  I,  p.  14. 


i74  WORK  AND  WEALTH 

accurate  balance  of  'preferences'  at  the  margins.  It  next  as- 
sumes perfect  mobility  or  freedom  of  access  for  all  capital  and 
labour  into  all  avenues  of  employment.  Finally,  it  assumes  a 
statical  condition  of  industry,  so  that  the  adjustment  of  the  fac- 
tors on  a  basis  of  equal  productivity  and  equal  remuneration  at 
the  margins  may  remain  undisturbed.  All  three  assumptions 
are  unwarranted.  Very  few  sorts  of  real  capital  or  labour  ap- 
proach the  ideal  of  infinite  divisibility  which  marginalism  re- 
quires. An  individual  worker,  sometimes  a  group,  is  usually  the 
minimal  'drop'  of  labour,  and  capital  is  only  infinitely  divisible 
when  it  is  expressed  in  terms  of  money,  instead  of  plants, 
machines  or  other  concrete  units.  Still  less  is  it  the  case  that 
capital  or  labour  flows  or  'tends'  to  flow  with  perfect  accuracy 
and  liberty  of  movement  into  every  channel  of  employment  where 
it  is  required,  so  as  to  afford  equality  of  remuneration  at  the  sev- 
eral margins.  Lastly,  in  most  industrial  societies  the  constant 
changes  taking  place,  in  volume  and  in  methods  of  industry, 
entail  a  corresponding  diversity  in  the  productivity  and  the  re- 
muneration of  the  capital  and  labour  employed  in  the  various 
industries  'at  the  margin.' * 

§  8.  This  slightly  technical  disquisition  is  rendered  necessary 
by  the  wide  acceptance  which  'marginalism'  has  won  in  aca- 
demic circles.  Its  expositors  are  able  to  deduce  from  it  practical 
precepts  very  acceptable  to  those  politicians  and  business  men 
who  wish  to  show  the  injustice,  the  damage  and  the  final  futility 
of  all  attempts  of  the  labouring  classes,  by  the  organised  pressure 
of  trade  unionism  or  by  politics,  to  get  higher  wages  or  other  ex- 
pensive improvements  of  the  conditions  of  their  employment. 

1  Professor  Pigou  (Wealth  and  Welfare,  p.  176),  though  adopting  the  general  posi- 
tion of  marginalism,  makes  a  concession,  as  to  its  applicability,  which  is  a  virtual 
admission  of  its  futility.  For  by  showing  that  only  in  'industries  of  constant  re- 
turns' are  'supply  price'  and  'marginal  supply  price*  equal,  and  that  in  industries 
of  'decreasing'  or  of  'increasing'  returns  there  exists  a  tendency  to  exceed  or  to 
fall  short  of  '  the  marginal  net  product  yielded  in  industries  in  general,'  he  virtually 
endorses  the  criticism  that  'marginalism'  assumes  a  statical  condition  of  industry. 
For  only  in  a  statical  condition  would  all  industries  be  found  conforming  to  con- 
stant returns:  the  operation  of  increasing  or  diminishing  returns  means  nothing  else 
than  that  changes  in  volume  or  methods  of  production  are  raising  or  lowering  pro- 
ductivity and  remuneration  above  or  below  the  equal  level  which  'marginalism' 
desiderates. 


THE  HUMAN  LAW  OF  DISTRIBUTION  175 

For  if  'marginalism'  can  prove  that,  as  Professor  Chapman 
holds,  'in  order  to  get  more  than  he  actually  does  get,  he  must 
become  more  valuable — work  harder,  for  example,'  it  has  evi- 
dently re-created  the  defences  against  the  attacks  of  the  workers 
upon  the  fortresses  of  capital  which  were  formerly  supplied  by 
the  wage-fund  theory  in  its  most  rigorous  form.  If  wages  can 
only  rise  on  condition  of  the  workers  working  harder  or  better, 
no  divergence  of  interests  exists  between  capital  and  labour,  no 
injustice  is  done  to  any  class  of  labour,  however  low  its  'worth' 
may  be,  and  no  remedy  exists  for  poverty  except  through  im- 
proved efficiency  of  the  workers.  If  our  political  economists 
can  bring  this  gospej  of  marginalism  home  to  the  hearts  and 
heads  of  the  working-classes,  they  will  set  aside  all  their  foolish 
attempt  to  get  higher  wages  out  of  rents  and  property  and  will 
set  themselves  to  producing  by  harder,  more  skilful  and  more 
careful  labour  an  enlarged  product,  the  whole  or  part  of  which 
may  come  to  them  by  the  inevitable  operation  of  the  economic 
law  of  equal  distribution  at  the  margin ! 

It  is  right  to  add  that  an  attempt  is  sometimes  made  to  bring 
marginalism  into  a  measure  of  conformity  with  the  notorious 
fact  that  large  discrepancies  exist  in  the  rates  of  remuneration 
for  capital  or  labour  or  both  in  various  industries,  by  treating 
these  inequalities  as  brief  temporary  expedients  for  promoting 
the  'free  flows'  of  productive  power  from  less  socially  productive 
into  more  socially  productive  channels,  and  for  stimulating  im- 
provements in  the  arts  of  industry.  Abnormal  gains,  of  the  na- 
ture of  prizes  or  bonuses,  are  thus  obtainable  by  individual  em- 
ployment, or  by  groups  of  employers,  who  are  pioneers  hi  some 
new  industry  or  in  the  introduction  of  some  new  invention  or 
other  economy.  But  these  rewards  of  special  merit,  it  is  argued, 
are  not  lasting,  but  disappear  so  soon  as  they  have  performed 
their  socially  serviceable  function  of  drawing  into  the  favoured 
employments  the  increased  quantity  of  new  productive  power 
which  will  restore  the  equality  of  productivity  and  remuneration 
'at  the  margins'. 

Now,  even  were  it  possible  to  accept  this  rehabilitation  of 
laissez-faire  theory,  accepting  this  equalising  'tendency'  as  pre- 
dominant and  normal,  and  classifying  all  opposing  tendencies 


176  WORK  AND  WEALTH 

as  mere  friction,  it  would  not  supply  a  law  of  distribution  that 
would  satisfy  the  conditions  of  our  'human'  law.  It  would  af- 
ford no  security  of  distribution  according  to  'needs',  or  human 
capacity  of  utilising  wealth  for  the  promotion  of  the  highest 
standard  of  individual  and  social  welfare.  It  would  remain  an 
ideally  good  distribution  only  in  the  sense  that  it  would  so  ap- 
portion the  product  as  to  furnish  to  all  producers  a  stimulus 
which  would  evoke  their  best  productive  powers,  so  contributing 
to  maximise  the  aggregate  production  of  marketable  goods.  Only 
so  far  as  man  was  regarded  as  an  economic  being,  concerned 
merely  in  the  nourishment  and  improvement  of  his  marketable 
wealth-producing  faculties,  would  it  be  a  sound  economy. 

Just  as  in  the  case  of  the  older,  cruder  'freedom  of  competi- 
tion', it  rests  upon  the  fundamental  assumption  that  all  the  prod- 
uct, the  real  income  of  the  community,  will  be  absorbed  in  'pro- 
ductive consumption',  defraying  the  bare  'costs'  of  maintaining 
and  improving  the  productive  powers  of  capital,  labour  and 
ability,  for  the  further  production  of  objective  economic  goods 
and  services.  It  would  remain  open  to  the  objection  that  it  as- 
sumed an  identity  of  economic  wealth  and  human  welfare  which 
is  inadmissible,  and  that  it  refused  to  provide  that  subordination 
of  economic  production  and  consumption  to  the  larger  concep- 
tion of  human  welfare  which  sound  principles  of  humanity  re- 
quire. Though  all  work  might  be  most  productively  applied,  it 
might  still  contain  excessive  elements  of  human  cost,  and  though 
all  products  were  productively  consumed  many  of  the  finer  needs 
of  individual  men  and  of  society  might  still  remain  without 
satisfaction. 

§  9.  But  the  full  divergence  between  the  operation  of  the 
actual  economic  law  of  distribution  and  the  human  law  can  best 
be  discovered  by  unmasking  the  fundamental  falsehood  of  all 
forms  of  the  laissez-faire  or  competitive  economy,  viz.  the  as- 
sumption that  the  national  income  tends  to  be  distributed  in  a 
just  economy  of  costs.  Is  there  in  fact  any  operative  law  which 
distributes  or  'tends'  to  distribute  the  £2,000,000,000  worth  of 
goods  that  form  our  income,  so  that  all,  or  even  most  of  it,  acts 
as  a  necessary  food  and  stimulus  to  evoke  the  full  and  best  pro- 
ductive work  of  those  who  receive  it?  Or,  if  there  are  failures 


THE  HUMAN  LAW  OF  DISTRIBUTION  177 

in  this  economical  distribution,  are  they  so  few,  so  small,  and  so 
ephemeral,  that  they  may  reasonably  be  treated  as  'friction',  or 
as  that  admixture  of  error  or  waste  which  is  unavoidable  in  all 
human  arrangements? 

Now  it  is  of  course  true  that  the  national  income  must  con- 
tinually provide  for  the  subsistence  of  the  labour,  ability  and 
capital,  required  to  maintain  the  existing  structure  of  industry 
and  the  current  output  of  goods  and  services.  The  brain-workers 
and  the  hand-workers  of  every  sort  and  grade,  from  artist  and 
inventor  to  routine  labourer,  must  be  continuously  supplied  with 
the  material  and  non-material  consumables  sufficient  to  enable 
them  to  replace  in  their  own  persons,  or  through  their  offspring, 
the  physical  and  psychical  wear  and  tear  involved  in  their  work. 
The  fertility  of  the  soil,  the  raw  materials,  fuel,  buildings,  tools 
and  machines,  requisite  in  the  various  productive  processes, 
must  similarly  be  maintained  out  of  the  current  output.  These 
bare  costs  of  subsistence,  the  wages,  salaries  and  depreciation 
funds  necessary  to  replace  the  wear  and  tear  of  the  human  and 
material  agents  of  production,  are  a  first  charge  upon  the  na- 
tional dividend.  To  refuse  the  payments  which  provide  this  sub- 
sistence would  be  suicidal  on  the  part  of  the  administrators  of 
the  income.  They  rank,  from  the  standpoint  of  society1  as  costs 
of  production.  If  the  product  which  results  from  the  productive 
use  of  these  factors  exceeds  what  is  necessary  to  defray  these 
costs,  the  surplus  may  be  employed  in  either  of  two  ways.  It 
may  be  distributed  among  the  productive  classes  in  extra- 
payments  so  as  to  evoke  by  a  set  of  economically-adjusted 
stimuli  such  enlarged  or  improved  efficiency  as  will  provide  for 
a  larger  or  a  better  product  in  the  future.  In  a  society  of  a  pro- 
gressive order  where  the  numbers  or  the  wholesome  needs,  or 
both,  are  on  the  increase,  no  surplus,  however  large,  can  be  ex- 
cessive for  such  provision.  A  socially  sound  and  just  distribu- 
tion of  the  surplus  would  be  one  which  absorbed  it  entirely  in 
what  may  be  called  the  'costs  of  growth'.  This,  however,  does 
not  by  any  means  imply  that  the  whole  of  the  surplus  must  ad- 

1  From  the  standpoint  of  the  individual  business  firm  'costs  of  production'  may 
include  many  higher  rates  of  payments,  necessary  under  the  actual  conditions  of 
competitive  industry  to  secure  the  use  of  the  required  agents. 


i78  WORK  AND  WEALTH 

vantageously  be  distributed  directly  among  the  individual  owners 
of  labour,  ability  or  saving  power,  in  order  to  evoke  from  them  the 
maximum  extension  of  their  several  productive  powers.  A  good 
deal  of  the  surplus  may,  indeed,  be  thus  applied  in  higher  in- 
dividual incomes  of  producers.  But  the  State,  politically  or- 
ganised society,  must  look  to  the  'surplus'  for  its  costs,  not  only 
of  upkeep  but  of  progress.  For  whatever  part  we  may  assign  to 
the  State  in  aiding  industrial  production,  all  will  agree  that  much 
of  its  work,  in  the  protection  and  improvement  of  the  conditions 
of  life,  is  essential  to  the  stability  and  progress  of  industry,  and 
involves  'costs'  which  can  only  be  met  by  a  participation  in  the 
industrial  dividend.  It  may  even  be  urged  that  the  claims  of 
the  State  to  maintenance  and  progress  are  equal  to  the  claims 
of  individuals  upon  the  surplus.  For  it  is  evident  that  industrial 
progress  demands  that  both  individual  and  social  stimuli  and 
nutriment  of  progress  must  be  provided  from  the  surplus  by 
some  considered  adjustment  of  their  several  claims.  A  surplus, 
thus  properly  apportioned  in  extra-subsistence  wages  and  other 
payments  to  producers  and  in  public  income,  would  be  produc- 
tively expended  and  would  thus  contribute  to  the  maximum 
promotion  of  human  welfare.1 

§  10.  But  though  in  such  a  society  as  ours  a  certain  part  of 
the  surplus  is  thus  'productively'  applied,  and  is  represented  in 
industrial  and  human  progress,  a  large  part  is  not  so  expended 
in  'costs  of  progress'.  A  large  quantity  of  'surplus'  is  every- 
where diverted  into  unproductive  channels.  The  income  which 
should  go  to  raise  the  efficiency  of  labour,  to  evoke  more  saving, 
and  to  improve  the  public  services,  is  largely  taken  by  private 
owners  of  some  factor  of  production  who  are  in  a  position  to  ex- 
tort from  society  a  payment  which  evokes  no  increase  of  produc- 
tive efficacy,  but  is  sheer  waste.  This  power  to  extort  super- 
fluous and  unearned  income  is  at  the  root  of  every  social-economic 
malady.  Indeed,  it  often  goes  beyond  the  diversion  of  surplus 
from  productive  into  unproductive  channels.  It  often  encroaches 
upon  costs  of  maintenance.  For  the  vital  statistics  of  large 

1  For  it  must  be  kept  in  mind  that  the  'productive  expenditure'  to  which  refer- 
ence is  here  made  refers  ultimately  to  a  standard  not  of  market  but  of  human 
values. 


179 

classes  of  labour  show  that  the  food,  housing  and  other  elements 
of  real  wages,  are  insufficient  for  the  upkeep  of  a  normal  working 
life  and  for  the  rearing  of  a  healthy  and  efficient  offspring.  This 
means  that  surplus  is  actually  eating  into  'costs',  in  that  the 
costs  of  maintenance,  which  sound  business  administration  au- 
tomatically secures  for  the  capital  employed,  are  not  secured  for 
the  labour.  The  reason  why  this  policy,  which  from  the  social 
standpoint  is  suicidal,  can  nevertheless  be  practised,  is  obvious. 
For  the  capital  'belongs  to'  the  business,  hi  a  sense  in  which  the 
labour  does  not.  A  sweating  economy  which  'lets  down'  the 
instruments  of  capital  is  of  necessity  unprofitable  to  the  individ- 
ual firms :  a  similar  sweating  economy  applied  to  the  instruments 
of  labour  need  not  be  unprofitable.  To  the  nation  as  a  whole, 
indeed,  regarded  merely  as  a  goods-producing  body,  any  such 
withholding  of  the  true  costs  of  maintenance  must  be  unprofit- 
able. But  there  are  businesses,  or  trades,  where  'sweated'  la- 
bour may  be  profitable  to  the  employers  or  the  owners  of  capital. 
There  are  many  more  where  such  a  wage-policy,  though  not 
really  profitable,  appears  so,  and  is  actually  practised  as  'sound 
business '.  How  large  a  proportion  of  the  14,0x30,000  wage-earners 
whose  incomes  are  paid  out  of  our  £2,000,000,000  come  under 
this  category  of  '  sweated '  workers,  we  cannot  here  profitably  dis- 
cuss. But,  apart  from  the  great  bulk  of  casual  workers  in  all  less 
skilled  trades,  there  are  large  strata  of  skilled  and  trained  adult- 
labour  in  the  staple  trades  of  the  country  which  are  not  paid  a 
full  subsistence  wage.  Such  are  the  large  bodies  of  women  em- 
ployed in  factories  and  workshops  and  in  retail  trade,  at  wages 
varying  between  eight  and  fourteen  shillings.  Indeed,  it  may 
safely  be  asserted  that  the  average  wage  of  an  adult  working- 
woman  in  this  country,  not  in  domestic  service,  is  a  sweating 
wage,  definitely  below  true  economic  maintenance,  and  still  more 
below  the  decent  human  requirements  of  life.  The  same  state- 
ment also  holds  of  the  wage  of  agricultural  labour  in  most  dis- 
tricts of  the  middle  and  southern  counties  of  England.  In  such 
employments  the  true  economic  'costs'  of  maintenance  are  not 
provided  out  of  the  present  distribution  of  the  national  income. 
Of  a  far  wider  range  of  labour  is  it  true  that  the  true  wages  of 
progressive  efficiency,  which  we  have  seen  are  vital  to  the  eco- 


i8o  WORK  AND  WEALTH 

nomic  progress  of  the  nation,  are  withheld.  Though  this  depriva- 
tion does  not  form  the  whole  case  for  labour  as  stated  from  the 
'human'  standpoint,  it  constitutes  the  heaviest  economic  count 
against  the  current  distribution  of  wealth.  The  full  physical  and 
spiritual  nutriment,  the  material  comforts,  the  education,  leisure, 
recreation,  mobility  and  broad  experience  of  life,  requisite  for 
an  alert,  resourceful,  intelligent,  responsible,  progressive  working- 
class,  are  not  provided  either  by  the  present  wage-system,  or  by 
the  growing  supplements  which  the  communal  action  of  the  State 
and  the  municipality  are  making  to  the  individual  incomes  of 
the  workers.  Out  of  the  £2,000,000,000  a  wholly  insufficient  sum 
is  distributed  in  wages  of  progressive  efficiency  for  labour. 

In  certain  other  respects  also  the  current  'costs'  distribution 
is  exceedingly  defective.  The  saving  which  goes  to  provide  for 
the  enlargement  of  the  capital  structure  of  industry  is  very  waste- 
fully  provided.  A  large  proportion  of  such  savings  as  are  con- 
tributed out  of  working-class  incomes  involves  an  encroachment 
upon  their  costs  of  progressive  efficiency,  and  represents,  from 
the  standpoint  both  of  the  individual  family  and  of  society,  bad 
economy.  Moreover,  the  methods  of  collection  and  of  applica- 
tion of  such  capital  are  so  wasteful  and  so  insecure  as  to  render 
working-class  thrift  a  byword  in  the  annals  of  business  admin- 
istration. 

§  u.  But  these  deficiencies  in  the  economy  of  'costs'  can  only 
be  understood  by  a  study  of  that  large  section  of  the  national 
income  which  in  its  distribution  furnishes  no  food  or  stimulus 
whatever  to  any  form  of  productive  energy.  Even  inv  the  ideal- 
ist laissez-faire  economics  we  saw  that  rent  of  land  was  distin- 
guished from  the  wages,  interest  and  profits,  which  constituted 
the  'costs  of  production',  and  was  described  as  'surplus'.  It 
was  recognised  that,  where  land  was  required  for  any  productive 
purpose,  its  owners  would  receive  in  payment  for  its  use  any  por- 
tion of  the  product,  or  its  selling  value,  which  remained  over  after 
the  competitively  determined  'costs'  of  capital  and  labour  had 
been  defrayed.  The  payment  was  economically  necessary  be- 
cause suitable  land  for  most  industrial  uses  was  scarce,  and  the 
amount  of  the  payment  would  depend  upon  how  much  was  left 
when  capital  and  labour  had  received  their  share.  For  the  land- 


THE  HUMAN  LAW  OF  DISTRIBUTION  181 

lord  would  take  all  the  surplus.  There  are  those  who  still  insist 
that  the  owners  of  land  are  everywhere  in  this  position  of  resid- 
uary legatees.  Land,  they  think,  is  always  relatively  scarce, 
capital  and  labour  always  and  everywhere  relatively  abundant. 
Free  competition  then  between  the  owners  of  the  relatively  abun- 
dant factors  will  keep  down  the  price  for  them  to  bare  'costs', 
leaving  a  maximum  amount  of  surplus  which  the  so-called  land 
'  monopolists '  will  receive  as  rent.  This  surplus  evokes  no  pro- 
ductivity from  the  soil  or  its  owners;  its  payment  does  nothing 
to  stimulate  any  art  of  industry.  But,  if  the  landowner  did  not 
take  it,  and  it  was  kept  by  farmers  as  profits,  or  by  labourers  as 
wages,  it  would  be  just  as  wasteful  from  the  productive  stand- 
point, as  if  it  passed  as  rent,  for,  upon  the  hypothesis  of  such 
economists,  the  full  competitive  wages  and  profits  are  the  only 
payment  entitled  to  count  as  cost,  and  no  addition  to  such  pay- 
ments would  increase  the  productivity  of  capital  or  labour. 

§  12.  Now  though  there  have  been  times  and  countries  in 
which  rent  of  land  was  the  only  considerable  surplus,  this  is  not 
the  case  in  any  developed  industrial  community  to-day.  Other 
factors  of  production,  capital,  ability,  or  even  in  some  instances 
labour,  share  with  land  the  power  to  extort  scarcity  prices. 

The  hypothetical  abundance,  mobility  and  freedom  of  com- 
petition, which  should  prevail  among  all  owners  of  capital,  abil- 
ity and  labour,  keeping  down  all  their  remuneration  to  a  common 
minimum,  are  everywhere  falsified  by  industrial  facts.  At  va- 
rious points  in  industry  capital  or  managerial  ability  is  found 
strongly  entrenched  against  the  competition  of  outsiders,  and 
able  to  set  limits  upon  internal  competition.  Wherever  this  con- 
dition is  found,  the  owners  of  the  capital  or  the  ability  so  advan- 
tageously placed  are  able  to  obtain  a  'surplus',  which,  in  its 
origin  and  its  economic  nature  and  effects,  nowise  differs  from 
the  economic  rents  of  land.  The  fluidity  and  complete  freedom 
which  appear  to  attach  to  the  term  capital,  so  long  as  we  treat 
it  in  its  abstract  financial  character,  disappear  as  soon  as  for 
capital  we  substitute  certain  skilfully  made  machinery  con- 
structed under  patent  rights  and  operated  by  more  or  less  secret 
processes,  turning  out,  with  the  assistance  of  carefully  trained 
and  organised  labour,  goods  which  enjoy  a  half-superstitious 


i82  WORK  AND  WEALTH 

fame  and  special  facilities  of  market.  An  examination  of  the 
capitalist  system  will  disclose  in  every  field  of  industry  numer- 
ous instances  of  businesses  or  groups  of  businesses,  sometimes 
constituting  whole  trades,  which  by  reason  of  some  advantage 
in  obtaining  raw  materials,  transport  or  marketing  facilities, 
public  contracts,  legal  privilege  or  protection,  by  using  some  su- 
perior process  of  manufacture,  skill  in  advertising,  established 
reputation,  financial  backing,  or  by  sheer  magnitude  of  opera- 
tions, are  screened  from  the  full  force  of  free  competition,  and  are 
earning  interest  and  profits  far  exceeding  the  minimum.  Some 
such  businesses  or  groups  of  businesses  possess  a  virtual  monopoly 
of  the  market,  and  can  control  output  and  prices,  so  as  to  secure 
abnormal  dividends.  Such  control  is,  to  be  sure,  never  absolute, 
its  control  of  prices  being  subject  to  two  checks,  the  restriction 
of  demand  which  attends  every  rise  of  prices,  and  the  increasing 
probability  of  competition  springing  up  if  profits  are  too  high. 
But  qualified  monopolies,  earning  dividends  far  larger  than  are 
economically  necessary  to  support  the  required  capital,  are 
everywhere  in  evidence.  Trusts,  cartels,  pools,  combines,  con- 
ferences, and  trade  agreements  of  various  potency  and  strin- 
gency, pervade  the  more  highly  organised  industries,  substitut- 
ing the  principle  of  combination  for  that  of  competition.  In  all 
major  branches  of  the  transport  trade  by  land  and  sea,  in  large 
sections  of  the  mining  industry,  in  the  iron  and  steel  industry 
and  in  many  branches  of  machine-making,  in  many  of  the  spe- 
cialised textile  trades,  in  the  chemical  and  other  manufactures 
where  special  scientific  knowledge  counts,  in  many  departments 
of  wholesale  and  retail  distribution,  and,  last  not  least,  in  bank- 
ing, finance  and  insurance,  freedom  of  investment  and  of  com- 
petition have  virtually  disappeared.  To  assume  that  fresh 
streams  of  capital,  labour  and  business  ability,  have  liberty  to 
enter  these  fields  of  enterprise,  and  by  their  equal  competition 
with  the  businesses  already  in  possession  so  to  increase  the  out- 
put, lower  selling  prices  and  keep  interest  and  profits  at  a  bare 
' costs'  level,  is  a  childish  travesty  of  the  known  condition  of 
these  trades.  To  affirm  that  such  mobility  and  liberty  of  com- 
petition is  the  sole  normal  'tendency',  and  that  the  monopolis- 
tic and  combinative  forces  merely  represent  friction,  is  so  grave 


THE  HUMAN  LAW  OF  DISTRIBUTION  183 

a  falsification  of  the  facts  as  to  put  out  of  court  the  whole  method 
of  economic  interpretation  which  is  based  thereon.  Concrete 
capital  has  none  of  the  qualities  assigned  to  the  abstract  capital 
of  these  economists.  It  is  neither  infinitely  divisible,  nor  abso- 
lutely mobile,  nor  accurately  directed,  nor  legally  and  econom- 
ically '  free '  to  dispose  itself  in  any  part  of  the  industrial  system 
where  the  current  interest  or  profit  exceeds  the  average.  Over 
large  tracts  of  industry  combination  is  more  normal  and  more 
potent  than  competition,  and  where  this  is  not  the  case,  the  most 
competitive  trades  will  be  found  honeycombed  with  obstructive 
clots,  businesses  enjoying  special  advantages  and  earning  corre- 
spondingly high  profits. 

§  13.  Because  certain  qualities  of  business  ability  are  requi- 
site, to  wit  astuteness,  keenness  of  judgment,  calculating  power, 
determination,  capacity  for  organisation  and  executive  ability, 
it  is  sometimes  claimed  that  the  high  rates  of  profit  which  accrue 
from  such  businesses  as  we  have  indicated  are  really  the  creation, 
not  of  monopoly  or  combination,  but  of  the  talents  of  these  entre- 
preneurs. But  even  though  it  be  admitted  that  some  such  ability 
is  essential  to  produce  or  to  maintain  a  successful  combination, 
can  the  entire  profits  of  such  a  combination  be  imputed  to  this 
ability  or  regarded  as  its  natural  and  proper  reward?  Take  the 
common  instance  of  the  'forestalled,  who  stops  the  supply  of 
some  commodity  on  its  way  to  a  market,  secures  the  whole  supply 
at  competitive  prices  from  the  various  contributors,  and  then 
sells  it  at  a  monopoly  price  fixed  by  himself.  Are  the  profits  of 
this  corner  a  product  of  ability  and  a  reward  of  ability,  and  not  a 
'surplus'  representing  an  artificially  contrived  scarcity  value? 
Or  take  the  case  of  a  contracting  firm,  which  persuades  all  the 
other  firms  in  a  position  to  compete  to  come  into  an  arrange- 
ment as  to  a  minimum  tender.  Are  the  extra  profits  due  to  such 
an  arrangement  to  be  regarded  as  wages  of  ability,  because  some 
tact  was  needed  to  work  the  thing?  But  suppose  we  granted 
the  whole  contention,  and  agreed  that  the  extra  dividends  paid 
to  shareholders  in  favoured  or  protected  businesses  were  really 
produced  by  the  ability  of  the  entrepreneur  or  manager,  what 
then?  It  is  not  proved  that  these  extra  profits  are  'costs',  not 
'surplus'.  On  the  contrary,  the  fact  that  they  can  be  taken  as 


i84  WORK  AND  WEALTH 

extra  dividends  or  bonuses  by  the  owners  of  the  capital,  instead 
of  passing  in  'wages  of  ability'  to  the  entrepreneur,  is  proof  posi- 
tive that  they  are  surplus.  For  if  they  were  a  subsistence  wage 
of  ability,  or  even  a  'prize',  essential  to  evoke  some  special  out- 
put of  skill  or  energy,  they  could  not  be  thus  diverted  from  the 
entrepreneur  to  the  shareholders.  In  fact,  there  is  no  reason  to 
suppose  that  any  very  rare  or  conspicuous  ability  is  evinced  in 
working  a  successful  pool  or  combine,  or  even  in  organising  a 
successful  business.  Still  less  is  there  reason  to  suppose  that  the 
profits  attending  such  an  enterprise  are  in  any  way  proportion- 
ate to  the  skill  or  energy  of  the  entrepreneur.  Everyone  is  aware 
that  the  contrary  is  the  case.  Indeed,  so  far  as  scientific,  pro- 
fessional, and  business  ability  is  industrially  useful  and  has  a 
claim  to  income,  enquiry  shows  that  there  is  no  better  security 
for  mobility,  freedom  of  competition  and  equality  of  payment, 
than  in  the  case  of  capital.  Inequalities  of  economic  conditions 
between  various  classes  of  our  population,  involving  inequalities 
of  nurture  and  of  education,  and  of  every  other  sort  of  'oppor- 
tunity' relevant  to  the  discovery,  training,  equipment  and  suc- 
cess of  'natural  ability',  set  up  a  series  of  almost  impenetrable 
barriers  to  the  free  flow  of  natural  ability  throughout  the  in- 
dustrial system,  and  give  rise  to  an  elaborate  hierarchy  of  re- 
stricted employments  where  the  rates  of  remuneration  repre- 
sent, not  any  inherent  services  of  ability,  but  the  degree  of  the 
restriction  in  relation  to  the  importance  of  the  work.  All  such 
advantages  of  opportunity  are  reflected  in  rates  of  payment  for 
1  ability '  which  carry  elements  of '  surplus. ' 

Though  some  portion  of  the  higher  remuneration  paid  to  suc- 
cessful professional  workers  may  be  regarded  as  interest  upon 
the  capital-outlay  of  their  education  and  training,  there  is  no 
reason  to  hold  that  the  extra  payment  is  adjusted  to  the  costs 
of  this  outlay.  Still  less  can  any  such  argument  avail  in  the  case 
of  high  business  profits.  Though  ability  and  expensive  training 
may  be  favouring  conditions  to  such  financial  success,  restricted 
competition  must  be  accounted  the  principal  direct  determinant 
of  all  such  extra  payments. 

§  14.  There  remains  one  final  demurrer  to  our  doctrine  of  the 
unproductive  'surplus'.  If  you  take  into  consideration,  it  is 


THE  HUMAN  LAW  OF  DISTRIBUTION  185 

urged,  all  the  unsuccessful  as  well  as  the  successful  businesses, 
you  will  find  that  the  average  return  for  capital  and  for  business 
ability  is  low  enough,  not  in  fact  more  than  represents  a  bare 
'costs'  economy.  Similarly  with  the  high  incomes  earned  by 
the  few  successful  men  in  the  professions  and  in  other  walks  of 
life.  Set  the  failures  fairly  against  the  successes  and  there  is  no 
net '  surplus '  to  take  account  of. 

But  this  contention  is  one  more  abuse  of  the  method  of  aver- 
ages. To  the  charge  that  one  man  is  overpaid,  it  is  no  answer 
that  another  is  underpaid.  To  the  statement  that  surplus 
emerges  in  the  payment  for  some  orders  of  capital  or  ability  it 
is  no  answer  to  say  that  other  capital  and  ability  does  not  even 
get  its  true  'costs'  or  subsistence  wages.  The  force  of  this  re- 
buttal is  still  further  strengthened  when  it  is  realised  to  what 
extent  the  success  of  those  who  succeed  is  directly  responsible 
for  the  failure  of  those  who  fail.  For  the  economic  strength  of 
those  whose  superior  advantages  have  secured  for  them  a  posi- 
tion of  control  will  necessarily  operate  to  make  the  competition 
of  outsiders  difficult  and  their  failure  probable.  Indeed,  a  por- 
tion of  the  gains  which  combination  yields  will  often  be  con- 
sciously applied  to  kill  the  competition  of  outsiders,  or  to  re- 
strict their  trade  to  the  less  profitable  or  the  more  precarious 
forms  of  enterprise.  But  even  where  this  business  policy  is  not 
adopted,  the  very  fact  that  strong  firms  and  'combines'  control 
many  markets,  must,  by  limiting  the  area  of  free  competition, 
intensify  the  competition  within  that  area  and  so  cause  the  fail- 
ures to  be  numerous. 

The  contention,  that  the  excessive  profits  of  successful  firms 
are  balanced  and  in  some  way  cancelled  by  the  losses  of  those 
that  fail,  is  also  contradicted  by  the  psychology  of  the  case.  If 
it  could  be  shown  that  the  chance  of  winning  these  high  gains 
was  in  fact  a  necessary  inducement  to  the  winners  to  stake  their 
capital  and  business  capacity  in  an  inherently  risky  line  of  enter- 
prise, there  might  be  some  force  in  this  plea.  But  to  the  men 
who  achieve  these  successes  business  is  not  a  simple  game  of 
hazard  in  which  they  have  merely  the  same  chance  as  the  others. 
Success  is  commonly  achieved  by  force,  strategy  and  the  posses- 
sion of  known  advantages,  and  is  used  to  strengthen  these  ad- 


186  WORK  AND  WEALTH 

vantages  and  so  to  increase  continuously  the  'pull'  by  which 
they  accumulate  their  gains  and  ruin  their  would-be  competitors. 
Although  tight  forms  of  monopoly  are  very  rare,  loose  or  partial 
restrictions  upon  competition  are  very  numerous  and  often  very 
profitable.  All  these  extra  gains,  issuing  from  various  forms  of 
natural  or  contrived  scarcity  in  all  sorts  of  industries,  are  rightly 
classed  as  unproductive  surplus.  Many  of  them  are  as  constant 
and  as  certain  as  the  economic  rents  of  land,  arise  in  the  same 
way  from  a  limitation  of  some  productive  factor,  and  are  'un- 
earned' income  in  the  same  sense  of  that  term.  Other  of  these 
gains  are  more  fluctuating,  proceeding  from  less  stable  forms  of 
privilege  or  combination,  but  while  they  exist  they  equally  be- 
long to  unproductive  'surplus'.1 

§  15.  The  distinction  between  that  portion  of  the  social  in- 
come which  goes  as  necessary  payments  to  support  and  evoke 
the  energies  of  body  and  mind  of  wealth-producers,  i.  e.  costs 
of  production,  and  that  which  goes  as  unproductive  'surplus' 
to  those  who,  possessing  some  necessary  instrument  of  produc- 
tion that  is  relatively  scarce,  can  exact  a  scarcity  price,  is  fun- 
damental in  a  valuation  of  industry.  For  this  surplus  not  only 
represents  sheer  economic  waste,  regarded  from  the  social  stand- 
point, but  it  can  be  shown  to  be  directly  responsible,  as  an  ef- 
ficient cause,  for  most  of  those  particular  maladies  in  our  cur- 
rent processes  of  production  and  consumption  which  impede  the 
economic  and  the  human  progress  of  the  nation. 

For  if  our  analysis  of  this  surplus  is  correct,  it  consists  in  the 
seizure  of  a  large  portion  of  the  fruits  of  individual  and  social 
productive  energies,  required  for  the  full  support  and  further 

1  Economists,  following  the  classical  distinction  made  by  Adam  Smith  in  the  case 
of  land-values,  may  break  up  the  surplus  into  various  species  of  scarcity  rents  on 
the  one  hand  and  differential  rents  on  the  other.  A  scarcity  or  'specific'  rent  will 
occur  when  the  whole  supply  of  some  factor  of  production,  e.  g.  all  the  land  available 
for  some  particular  use,  or  all  the  capital  employed  in  some  trade,  is  in  a  position  to 
take  a  payment  higher  than  is  obtainable  where  more  land  or  capital  is  available 
for  this  particular  use  than  is  required  to  turn  out  the  supply  of  goods  that  is  actually 
sold.  The  worst  hop  land  in  use  in  England  obtains  a  positive  rent,  the  worst 
equipped  ships  in  the  Atlantic  combine  obtain  a  surplus-profit:  better  acres  of  hop 
land,  better-equipped  ships  obtain  a  differential  rent  or  profit  in  addition.  Both 
specific  gain  and  differential  gain  are  surplus,  and  the  basis  of  each  is  a  scarcity  of 
supply  and  a  restraint  of  competition. 


THE  HUMAN  LAW  OF  DISTRIBUTION  187 

stimulation  of  these  energies  and  for  the  wider  human  life  which 
they  are  designed  to  serve,  and  their  assignment  to  persons 
who  have  not  helped  to  make  them,  do  not  need  them,  and  can- 
not use  them.  The  payment  of  surplus  takes  large  sections  of 
the  income,  needed  to  raise  the  economic  and  human  efficiency 
of  the  working-classes,  or  to  enable  society  to  enlarge  the  scope 
and  to  improve  the  quality  of  the  public  services,  and  disposes 
them  in  ways  that  are  not  merely  wasteful  but  injurious.  In 
effect,  all  the  excessive  human  costs  of  production  and  all  the 
defective  human  utilities  of  consumption,  which  our  separate 
analysis  of  the  two  processes  disclosed,  find  their  concrete  and 
condensed  expression  in  this  'surplus'.  The  chief  injuries  it 
causes  may  be  summarised  as  follows: 

(1)  Flowing  abundantly  as  'unearned'  income  into  the  posses- 
sion of  'wealthy'  individuals  and  classes,  it  thereby  causes  large 
quantities  of  the  national  income  to  be  consumed  with  little  or 
no  benefit.    For  much,  if  not  most,  of  this  surplus,  being  devoted 
to  luxury,  waste,  extravagance  and  'illth',  furnishes  by  its  ex- 
penditure not  human  utility  but  human  'cost',  not  an  enhance- 
ment but  a  diminution  of  the  sum  of  human  welfare. 

(2)  By  enabling  its  recipients  to  disobey  the  sound  biological 
and  moral  precept,  'In  the  sweat  of  thy  face  thou  shalt  eat 
bread,'  it  calls  into  being  and   sustains  a  leisured  or  unem- 
ployed class  whose  existence  represents  a  loss  of  productive 
energy  and  of  wealth-production  to  the  nation. 

(3)  The  evil  prestige  and  attraction  of  the  life  of  sensational 
frivolity  this  idle  class  is  disposed  to  lead  tends  by  suggestion 
to  sap  the  wholesome  respect  for  work  in  the  standards  of  the 
rest  of  the  community,  and  to  encourage  by  servile  imitation  in- 
jurious or  wasteful  methods  of  expenditure. 

(4)  The  economic  necessity  of  producing  this  surplus  imposes 
excessive  toil  upon  the  productive  classes,  being  directly  re- 
sponsible for  the  long  hours  and  speeding-up  which  constitute 
the  heaviest  burden  of  human  costs.    The  direction  which  the 
expenditure  of  the  surplus  gives  to  capital  and  labour  degrades 
the  character  of  large  bodies  of  workers  by  setting  them  to  futile, 
frivolous,  vicious  or  servile  tasks. 

(5)  The  disturbing  irregularity  of  the  trades  which  supply 


i88  WORK  AND  WEALTH 

the  capricious  and  ever-shifting  consumption,  upon  which  the 
1  surplus'  is  so  largely  spent,  imposes  upon  the  workers  a  great 
cost  in  the  shape  of  irregularity  of  employment,  and  a  consider- 
able burden  of  costly  saving  by  way  of  insurance  against  this 
irregularity. 

(6)  By  stamping  with  the  badge  of  irrationality  and  inequity 
the  general  process  of  apportionment  of  income,  the  surplus  im- 
pairs that  spirit  of  human  confidence  and  that  consciousness  of 
human  solidarity  of  interests  which  are  the  best  stimuli  of  in- 
dividual and  social  progress. 

The  surplus  element  in  private  income  thus  represents  the  hu- 
man loss  from  defects  in  the  current  distribution  of  wealth,  not 
only  the  loss  from  wasteful  and  injurious  consumption  but  from 
wasteful  and  injurious  production,  an  exaggeration  of  human 
costs  and  a  diminution  of  human  utilities.  The  primary  object 
of  all  social-economic  reforms  should  be  to  dissipate  this  surplus 
and  to  secure  its  apportionment  partly  as  useful  income  for  in- 
dividual producers,  partly  as  useful  income  for  society,  so  that, 
instead  of  poisoning  the  social  organism  as  it  does  now,  it  may 
supply  fuller  nourishment  and  stimulus  to  the  life  of  that  or- 
ganism and  its  cells. 

Thus  directed,  partly  into  higher  wages  of  efficiency  for 
workers,  partly  into  further  income  for  the  enrichment  of  the 
common  life,  the  'surplus'  will  in  effect  cease  to  be  surplus, 
being  completely  absorbed  in  satisfying  the  human  requirements 
of  individuals  and  society.  For  not  only  will  it  furnish  the  ex- 
penditure required  to  bring  the  standard  of  consumption  of  all 
grades  of  workers  up  to  the  level  of  a  full  satisfaction  of  human 
needs,  but  it  will  establish  an  entirely  new  conception  of  public 
income.  For  it  will  be  recognised  that  the  public  revenue,  taken 
either  by  taxation  or  as  profits  of  public  industry,  is  earned  by 
public  work  precisely  as  the  revenue  of  individuals  is  earned  by 
private  work,  and  is  required  for  public  consumption  just  as 
private  income  is  required  for  private  consumption.  Thus  the 
whole  of  what  now  figures  as  a  wasteful '  surplus  *  would  be  applied 
in  productive  consumption. 

The  scope  of  the  operation  of  this  organic  law,  of  course, 
widely  transcends  this  special  application  to  the  distribution 


THE  HUMAN  LAW  OF  DISTRIBUTION  189 

of  economic  income.  It  is  the  general  law  of  order  and  of  pro- 
gress in  all  departments  of  organic  activity.  But  for  our  task, 
that  of  a  human  valuation  of  industry,  its  worth  is  supreme.  For 
in  the  application  of  the  organic  law  of  distribution  all  the  great 
antagonisms  which  loom  so  big  as  social  Problems,  Luxury  and 
Poverty,  Toil  and  Idleness,  The  Individual  and  Society,  Au- 
thority and  Liberty,  find  their  solution.1 

1  For  a  detailed  and  more  technical  defence  of  the  fundamentally  important  dis- 
tinction between  'costs'  and  'surplus'  and  for  a  closer  analysis  of  the  sources  of 
'unproductive  surplus ',  readers  may  be  referred  to  the  author's  earlier  work,  The  In- 
dustrial System:  an  enquiry  into  earned  and  unearned  income.  (Longman's  2nd  and 
revised  edition,  1909). 


CHAPTER  XIII 

THE  HUMAN  CLAIMS   OF   LABOUR 

§  i.  The  validity  of  the  human  law  of  distribution  is  well 
tested  by  considering  the  light  it  sheds  upon  the  modern  claims 
of  Labour  and  the  Movement  which  is  endeavouring  to  realise 
these  claims.  For  the  significance  of  the  Labour  Movement 
will  continue  to  be  misunderstood  so  long  as  it  is  regarded  as  a 
mere  demand  for  a  larger  quantity  of  wages  and  of  leisure,  im- 
portant as  these  objects  are.  The  real  demand  of  Labour  is 
at  once  more  radical  and  more  human.  It  is  a  demand  that 
Labour  shall  no  longer  be  bought  and  sold  as  a  dead  commodity 
subject  to  the  fluctuations  of  Demand  and  Supply  in  the  market, 
but  that  its  remuneration  shall  be  regulated  on  the  basis  of  the 
human  needs  of  a  family  living  in  a  civilised  country. 

At  present  most  sorts  of  labourers  are  paid  according  to  the 
quantity  of  labour-power  they  give  out,  and  according  to  the 
market-price  set  upon  a  unit  of  each  several  sort  of  labour- 
power.  This  means  that  the  actual  weekly  earnings  of  some 
grades  of  labourer  are  much  higher  than  those  of  other  grades, 
not  because  the  work  takes  more  out  of  them,  or  because  it  in- 
volves a  higher  standard  of  living,  but  because  some  natural, 
some  fortuitous,  or  some  organised  scarcity  of  supply  exists 
in  the  former  grades,  while  there  is  abundance  of  supply  in  the 
latter.1  Moreover,  the  weekly  earnings  for  any  of  these  sorts  of 
labour  will  vary  from  week  to  week,  from  month  to  month,  or 
year  to  year,  with  the  variations  of  Supply  and  Demand  in  the 
Labour  Market.  The  income  of  the  working  family  will  thus 
vary  for  reasons  utterly  beyond  its  control,  though  its  require- 
ments for  economic  and  human  efficiency  show  no  such  varia- 
tion. Thus  there  is  no  security  for  any  class  standard  of  living. 

Within  each  class  or  grade  of  labour  there  will  be  variations 

1  The  width  of  variations  in  the  weekly  earnings,  involving  in  most  instances  a 
nearly  corresponding  variety  of  family  income,  may  be  illustrated  by  the  following 

190 


THE  HUMAN  CLAIMS  OF  LABOUR 


of  the  individual  family  wage,  based  on  the  amount  of  labour- 
power  actually  given  out  in  the  week.    A  less  effective  worker, 

estimate  compiled  by  Mr.  Webb,  from  a  careful  analysis  of  official  wage  returns. 
New  Statesman,  May  10, 1913. 

TABLE  SHOWING  ESTIMATED  EARNINGS  OF  EMPLOYED  MANUAL 
WORKING  WAGE-EARNERS  IN  THE  UNITED  KINGDOM  IN  THE 
YEAR  1912 

MEN 


Class 

Numbers 

Average  rate 
of  earnings 
in  a  full  week 
(including  all 
emoluments) 

Average  wages 
bill  for  a  full 
week 

Yearly  wages 
bill  (allowing 
5  weeks  for 
short  time, 
sickness,  in- 
voluntary holi- 
days and  un- 
employment) 

Men  in  Situations: 
Below  153  

320,000. 
640,000  . 
1,600,000. 
1,680,000. 
1,680,000. 
1,040,000. 
560,000. 
480,000  . 

•  4% 
-  8% 

•20% 
•21% 
•21% 
•13% 

•  7% 
.  6% 

s.d. 
(abt.)  13.0 
(abt.)  18.0 

22.6 

27.6 
32.6 
37-6 
42.6 
50.0 

Million  £ 

O.2I 
0.58 
1.  80 
2.31 

2-73 
i.  95 

1.20 
I.  2O 

Million  £ 

10 

27 

85 
109 
128 
92 
56X 
56^ 

153.  to  203  

203.  to  253  
253.  to  303  

•?os.  to  •KS.  .  . 

3^3.  to  4OS.  .  . 

403.  to  455  

Over  453  

Men  in  Situations  .  . 
Casuals  

8,000,000. 
700,000 

.100% 

30.0 

12.  0 

12.  0 
O.42 

564 
18.5 

Adult  Males  

8,700,000 

28.4 

12.42 

582.5 

Boys  

1,900,000 

IO.O 

0-95 

44.0 

All  Males  

10,600,000 

25-3 

I3-38 

626.5 

Average  Earnings  per  Adult  Man  throughout  the  year: 
per  week. 

WOMEN 


£66.95  or  £i-5-9 


Class 

Numbers 

Average  earn- 
ings in  a  full 
week 

Average 
weekly  wages 
bill  for  a  full 
week 

Yearly  wages 
bill  (net  as 
above) 

Women  

3,000,000 

s.d. 

12.  O 

Million  £ 
1.8 

Million  £ 
8?.  o 

Girls  

1,500,000 

8.0 

0.6 

28.0 

Casuals  

100,000 

3.6 

o.oi<; 

o  ? 

All  Females  .  . 

4,600,000 

10.6 

2.4.1"; 

IZl.K 

Average  Earnings  per  Adult  Woman  throughout  the  year:  (~)  £27.58,  or  IDS. 
7d.  per  week. 
Total  Wages  Bill  (both  sexes)  for  the  year,  net:  £740,000,000. 


i92  WORK  AND    WEALTH 

even  though  he  puts  out  as  much  effort,  will  earn  less  money  than 
a  more  effective.  This  seems  necessary,  reasonable  and  even 
just,  so  long  as  we  accept  the  ordinary  view  that  labour  should 
be  bought  and  sold  like  any  other  commodity. 

But  once  accept  the  view  that  to  buy  labour-power,  like  other 
commodities,  at  a  price  determined  purely  by  relations  of  Supply 
and  Demand,  is  a  policy  dangerous  to  the  life  and  well-being  of 
the  individual  whose  labour-power  is  thus  bought  and  sold,  to 
those  of  his  family  and  of  society,  your  attitude  towards  the 
labour-movement  in  general,  and  even  to  certain  demands  which 
at  first  sight  seem  unreasonable,  will  undergo  a  great  change. 

The  fundamental  assumption  of  the  Labour  Movement,  in 
its  demands  for  reformed  remuneration,  is  that  the  private  hu- 
man needs  of  a  working  family  should  be  regularly  and  securely 
met  out  of  weekly  pay.  The  life  and  health  of  the  family,  and 
that  sense  of  security  which  is  essential  to  sound  character  and 
regular  habits,  to  the  exercise  of  reasonable  foresight,  and  the 
formation  and  execution  of  reasonable  plans,  all  hinge  upon  this 
central  demand  for  a  sufficiency  and  regularity  of  weekly  income 
based  upon  the  human  needs  of  a  family. 

§  2.  This  explains  alike  the  working-class  objections  to  piece- 
work, the  demand  for  a  mimmum  wage,  and  the  policy  of  limita- 
tion of  individual  output.  For  piece-work,  even  more  than 
time-work,  is  based  upon  a  total  ignoring  of  the  human  condi- 
tions which  affect  the  giving  out  of  labour-power.  It  is  the  plain- 
est and  most  logical  assertion  of  the  commodity  view  of  labour, 
the  most  complete  denial  that  the  human  needs  of  the  worker 
have  any  claim  to  determine  what  he  should  be  paid. 

So  firmly-rooted  in  the  breast  of  the  ordinary  non-working 
man,  and  of  many  working-men,  is  the  notion  that  a  man,  who 
has  produced  twice  as  large  an  output  as  another  man,  ought,  as 
a  simple  matter  of  right  or  justice,  to  receive  a  payment  twice  as 
large,  that  it  is  very  difficult  to  dislodge  it.  It  represents  the 
greatest  triumph  of  the  business  point  of  view  over  humanity. 
If  a  man  has  done  twice  as  much,  of  course  he  ought  to  receive 
twice  as  much!  It  seems  an  ethical  truism.  And  yet  I  venture 
to  affirm  that  it  has  nothing  ethical  in  it.  It  has  assumed  this 
moral  guise  because  of  a  deep  distrust  of  human  nature  which 


THE  HUMAN  CLAIMS  OF  LABOUR  193 

it  expresses.  How  will  you  get  a  man  to  do  his  best  unless  you 
pay  him  according  to  the  amount  he  does?  It  is  this  purely  prac- 
tical consideration  that  has  imposed  upon  the  piece-work  system 
the  appearance  of  axiomatic  justice. 

It  is  not  difficult  to  strip  off  the  spurious  ethics  of  the  princi- 
ple. You  say  that  piece-wages  or  payment  by  result  is  right  be- 
cause it  induces  men  to  do  their  best.  But  what  do  we  mean  by 
'doing  their  best'?  A  weak  man  may  hew  one  ton  of  coals  while 
a  strong  man  may  hew  two.  Has  not  the  former  'done  his  best' 
equally  with  the  latter?  The  strength  of  a  strong  man,  the  nat- 
ural or  even  the  acquired  skill  of  a  skilful  man,  cannot  be  as- 
sumed as  a  personal  merit  which  deserves  reward  in  the  terms  of 
payment.  If  there  is  merit  anywhere,  it  is  in  the  effort,  not  in 
the  achievement  or  product,  and  piece-wages  measure  only  the 
latter. 

No !  there  is  nothing  inherently  just  in  the  piece-wage  system. 
Its  real  defence  is  that  it  is  the  most  practical  way  of  getting  men 
to  work  as  hard  as  they  can:  it  is  a  check  on  skulking  and  sugar- 
ing. It  assumes  that  no  other  effective  motive  can  be  made  op- 
erative in  business  except  quantity  of  payment. 

§  3.  As  Ruskin  and  many  others  have  remarked,  the  lie  is 
given  to  this  assumption  in  an  increasing  number  of  kinds  of 
work  where  the  highest  qualities  of  human  power,  the  finest 
sorts  of  mental  skill  and  responsibility,  are  involved.  Public 
servants  of  all  grades,  from  Cabinet  Ministers  and  Judges  down 
to  municipal  dustmen,  are  paid  by  salaries,  not  by  piece-wages. 
The  same  is  true  of  the  more  remunerative  and  more  responsible 
work  in  private  businesses.  No  Government,  no  private  firm, 
buys  the  services  of  its  most  valuable  employees  at  the  lowest 
market-price,  or  attempts  to  apply  to  them  a  piece-work  scale. 
It  would  not  pay  them  to  do  so,  and  they  know  it.  Nor  is  this 
merely  because  some  sorts  of  work  do  not  easily  admit  of  being 
measured  by  the  piece.  It  would  be  possible  to  pay  Judges,  as 
counsel  are  paid,  by  the  case:  Cabinet  Ministers  might  be  paid 
on  piece-wages  for  Laws  measured  by  the  number  or  length  of 
their  clauses.  The  chief  reason  for  adopting  payment  by  fixed 
salary  is  that  it  is  reckoned  a  wise  mode  of  securing  good  individ- 
ual services.  It  is  recognised  that  each  piece  of  work  will  be 


i94  WORK  AND  WEALTH 

better  done,  if  the  workers  set  about  it  in  a  thoroughly  disinter- 
ested manner,  concentrated  in  their  thoughts  and  feelings  en- 
tirely on  the  work  itself,  and  not  entangled  in  the  consideration 
of  what  they  are  to  get  out  of  it.  This  is  supposed  to  be  the 
difference  between  the  professional  man  and  the  tradesman, 
that  the  former  performs  a  function  and  incidentally  receives  a 
fee,  while  the  latter,  by  the  very  acts  of  buying  and  selling  that 
constitute  his  business,  keeps  his  mind  set  upon  the  profit  from 
each  several  transaction. 

But  the  fixed  and  guaranteed  salary  for  public  servants  has 
another  ground.  It  may  profit  a  business  firm  to  practise  an 
economy  of  sweating,  to  drive  its  employees  and  consume  their 
health  and  strength  by  a  few  years'  excessive  toil,  to  take  on  new 
casual  workers  for  brief  spurts  of  trade,  to  sack  employees  ruth- 
lessly, as  soon  as  trade  begins  to  flag,  or  their  individual  powers 
of  work  are  impaired  by  age.  A  piece-work  system,  with  no 
guarantee  of  employment  or  of  weekly  wage,  may  be  a  sound 
business  economy  for  a  private  firm.  It  cannot  be  a  sound 
economy  for  a  State  or  a  Municipality. 

For  a  large  and  increasing  share  of  the  work  and  the  expendi- 
ture of  most  States  and  Municipalities  is  applied  in  trying  to 
mend  or  alleviate  damages  or  dangers  to  the  health,  security, 
intelligence,  and  character  of  the  workers  and  their  families, 
arising  from  insufficiency  of  work  and  wages  or  other  defects  of 
private  industrialism.  It  would  obviously  be  bad  public  economy 
to  break  down  the  lives  and  homes  of  public  employees  by  under- 
paying or  overworking  them,  or  by  dismissing  and  leaving  them 
to  starve  when  work  was  slack.  For  what  was  saved  in  the  wage- 
bill of  the  particular  department,  would  be  squandered  in  poor- 
law,  police,  hospitals,  old-age  pensions,  invalidity  and  employ- 
ment relief.  Nor  is  that  all.  A  mass  of  ill-paid,  ill-housed 
workers,  alternately  overworked  and  out  of  work,  stands  as  a 
chief  barrier  in  every  one  of  those  paths  of  social  progress  and 
national  development  which  modern  statecraft  sets  itself,  to 
follow.  The  low  wage  of  unskilled  labour  is  to-day  a  source  of 
infinite  waste  of  the  forces  of  national  education.  Still  keeping 
our  argument  upon  the  narrowest  lines  of  economy,  we  plainly 
realise  that  the  financial  resources,  upon  which  the  State  can 


THE  HUMAN  CLAIMS  OF  LABOUR  195 

draw  for  all  her  services,  depend  in  the  last  resort  upon  the 
general  economic  efficiency  of  the  working  population,  and  that 
a  system  of  public  employment  which  was,  however  indirectly, 
detrimental  to  this  health,  longevity  and  intelligence,  would 
rank  as  bad  business  from  the  public  standpoint. 

It  is  possible  that  in  this  country  the  salary  mode  of  payment 
is  gaining  ground.  Apart  from  the  public  services,  national  and 
municipal,  which  now  employ  some  7  per  cent  of  the  total  em- 
ployed population,  the  great  transport  and  the  distributive  in- 
dustries are  almost  entirely  run  upon  the  salary  basis.  These 
departments  of  industry  are  constantly  increasing,  not  only  in 
absolute  size,  but  in  the  proportion  of  the  total  employment  they 
afford.  To  them  must  be  added  the  large  class  of  domestic 
service.  Such  great  salaried  services  cannot,  indeed,  be  claimed 
as  triumphs  for  the  organic  principle  of  distribution,  or  payment 
according  to  needs.  For  the  most  part  they  are  very  unsatis- 
factory modifications  of  the  piece-wage  or  commodity  view  of 
labour.  For,  except  for  the  small  higher  grades  of  officials,  they 
mostly  retain  the  two  chief  defects  of  the  ordinary  wage-system, 
a  payment  of  weekly  income  not  based  on  a  proper  computation 
of  human  needs,  and  a  lack  of  adequate  security  of  tenure.  Over 
a  large  part  of  the  field  of  industry  and  commerce  where  weekly 
fixed  salaries  are  paid,  there  exists  a  flagrant  disregard  for  all 
considerations  of  human  subsistence.  Some  of  the  worse,  though 
not  the  worst,  forms  of  'sweating'  are  found  in  shops,  workshops 
and  factories  where  women  are  employed  on  weekly  salaries. 

None  the  less,  it  remains  true  that  the  salary  is  a  more  ra- 
tional form  of  payment  for  labour  than  the  time  or  piece  wage, 
and  that,  as  the  humanisation  of  industry  proceeds,  it  will  more 
and  more  displace  the  wage-system.  For  where  salaries  are  paid, 
the  consideration  of  needs  or  subsistence  does  tend  always  to 
qualify  the  mere  commodity  view  of  labour. 

Piece-wage  or  time-wage  ignores  the  worker  as  a  human  being 
and  the  supporter  of  a  family:  it  ignores  him  as  a  personality 
and  regards  him  merely  as  an  instrument  for  giving  out  units  of 
productive  power  to  be  paid  for  on  the  same  terms  as  the  units 
of  mechanical  power  used  hi  working  machinery. 

§  4.  The  Labour  Movement  insists  that  the  personal  and 


196  WORK  AND  WEALTH 

human  factor  is  fundamental  as  a  condition  in  the  labour  bar- 
gain. If  labour  is  treated  as  a  mere  commodity,  its  price  affords 
no  security  of  life  to  the  labourer.  It  may  not  find  a  customer 
at  all,  and  so  he  starves  and  with  him  his  family,  the  future 
supply  of  labour.  Or,  left  to  the  fluctuations  of  the  market,  it 
may  sell  at  a  price  which  is  insufficient  for  his  maintenance.  The 
fluctuations  of  price  in  all  other  markets  involve  only  the  pe- 
cuniary profit  or  loss  of  those  who  sell,  fluctuations  of  the  price 
of  labour  involve  the  existence  and  well-being  of  human  families 
and  of  the  nation.  Hence  the  attack  of  organised  labour  on  this 
whole  conception  of  the  labour-market,  and  the  demand  that  the 
remuneration  of  labour  shall  not  be  left  to  the  higgling'of  a  market. 

The  chief  fight  is  for  a  secure  weekly  income,  or  for  conditions 
of  employment  which  lead  up  to  this.  A  minimum  or  a  living 
wage  is  the  usual  name  given  to  this  demand.  Complaint  is 
made  of  the  vagueness  of  the  demand.  But  this  vagueness  does 
not  make  the  demand  unreasonable.  A  living  wage  indeed  is 
elastic  as  life  itself:  it  expands  and  will  continue  to  expand,  with 
the  development  of  life  for  the  workers.  But  what  in  effect  is 
meant  at  the  present  by  a  living  or  subsistence  wage  is  such  a 
regular  weekly  sum  as  suffices  to  maintain  the  ordinary  working 
family  in  health  and  economic  efficiency. 

It  is  contended  that  no  purchase  of  labour  should  be  permitted 
which  entails  the  degradation  of  that  standard.  When  a  mini- 
mum rate  of  piece-wages  is  demanded,  the  implicit  understanding 
is  that  it  is  such  as  will  yield  under  normal  conditions  the  ordi- 
nary weekly  subsistence  or  standard  wage.  Since  piece-wages 
are  so  firmly  established  in  many  trades  that  it  is  impracticable 
to  demand  their  immediate  abolition,  the  actual  struggle  be- 
tween employees  and  employers  is  as  to  whether  these  piece- 
wages  shall  be  allowed  to  fluctuate  indefinitely,  being  dragged 
at  the  heels  of  the  prices  of  commodities,  or  whether  an  absolute 
limit  shall  be  set  upon  their  fall.  The  employer  says,  'When 
trade  is  good  and  prices  and  profits  high,  labour  will  share  the 
prosperity  in  high  rates  of  wage  and  large  weekly  earnings:  so, 
when  trade  is  bad  and  prices  and  profits  low,  labour  must  share 
this  adversity  and  take  low  pay.'  Organised  labour  replies, 
'No,  there  is  no  parity  between  the  power  of  capital  and  of 


THE  HUMAN  CLAIMS  OF  LABOUR  197 

labour  to  bear  depressions:  capital  is  strong  and  can  bear  up 
against  low  profits  without  perishing,  labour  is  weak  and  cannot 
bear  up  against  low  wages.  We  will  only  sell  our  labour-power 
on  condition  that  a  lower  limit  is  set  upon  its  price,  such  a  limit 
as  will  enable  the  labourer  to  keep  body  and  soul  together,  and 
to  maintain  that  efficiency  which  constitutes  his  working  capital. 
This  minimum  wage  should  be  regarded  as  a  fixed  cost  in  your 
production.  At  present  the  prices  of  your  goods  oscillate  with- 
out any  assigned  limit.  You  accept  low  contracts  for  work,  and 
then  adduce  this  low  price  as  a  reason  for  reducing  wages.  Let 
a  minimum  wage  once  be  adopted  in  the  trade,  and  contract 
prices  cannot  be  accepted  on  so  low  a  level.  The  minimum  wage 
will  thus  help  to  steady  selling  prices  and  to  regulate  employ- 
ment and  output.' 

Both  the  economics  and  the  social  ethics  of  this  labour  con- 
tention are  in  substance  sound.  So  long  as  the  price  of  labour 
is  left  to  higgling  in  a  competitive  market,  there  is  nothing 
to  prevent  the  wages  falling  to  the  lowest  level  at  which  a 
sufficient  number  of  workers  can  be  induced  to  consent  to 
work,  and  that  level  may  involve  a  reduction  of  the  standard 
of  living  in  their  families  below  the  true  subsistence  point. 
The  fixing  of  wages  by  so-called  free  competition  affords  no 
security  for  a  family  wage  of  efficiency  or  even  of  subsistence. 
There  should  be  no  mistake  upon  this  essential  matter.  The 
doctrine  of  'economy  of  high  wages'  has  no  such  general  effi- 
cacy as  is  sometimes  suggested.  Though  in  many  cases  high 
wages  are  essential  to  maintain  and  evoke  the  energy  and  effi- 
ciency required,  in  other  cases  they  are  not.  From  the  standpoint 
of  the  immediate  profits  of  employers '  sweating '  often  pays.  But 
from  the  standpoint  of  society  it  never  pays. 

Therefore,  the  policy  of  the  organised  workers,  in  seeking  to 
enforce  the  doctrine  of  a  minimum  wage,  is  not  only  a  policy  of 
self-preservation  for  the  working-classes  but  a  salutary  social 
policy.  It  is  for  this  reason  that  the  State  intervenes  in  favour 
of  the  practice,  establishing  Trade  Boards  to  enforce  its  applica- 
tion in  so-called  'sweated  trades',  and  acknowledges,  in  theory 
at  any  rate,  its  validity  in  aU  public  employments  and  public 
contracts. 


198  WORK  AND  WEALTH 

§  5.  Although  this  minimum  wage  is  tolerably  remote  from 
the  ideal  of  a  fixed  weekly  salary  in  most  trades,  it  is  a  true  step 
in  this  direction.  The  most  controverted  item  in  trade-union 
policy,  the  limitation  of  individual  output,  is  also  partly  actuated, 
by  the  same  motive.  Few  things  make  the  ordinary  business 
man  more  indignant  than  the  trade-union  regulations  in  certain 
trades  which  restrain  stronger  or  quicker  workers  from  putting 
forth  their  full  productive  energy.  They  denounce  alike  its 
dishonesty  and  its  bad  economy.  It  is  based,  they  say,  upon  the 
'lump  of  labour'  fallacy,  the  false  notion  that  there  exists  an 
absolutely  limited  amount  of  employment,  or  work  to  be  done, 
and  that  if  the  stronger  or  quicker  men  do  more  than  their  share, 
the  others  will  go  short.  This  refusal  to  allow  each  man  to  do 
his  best,  like  the  related  refusal  to  get  the  full  work  out  of  new 
labour-saving  machinery,  appears  monstrously  perverse  and 
wicked.  But,  though  partly  animated  by  short-sighted  economic 
views,  this  policy  is  not  entirely  to  be  thus  explained.  The  level- 
ling down  of  the  output  of  all  workers  to  a  standard  has  partly 
for  its  object  the  establishment  of  greater  evenness  of  income 
among  the  workers  in  a  trade.  At  any  given  time  in  a  given 
mill,  or  factory  town,  the  actual  amount  of  available  employ- 
ment is  limited,  and  for  the  time  it  is  true  that  by  limitation  of 
individual  output  a  larger  number  of  workers  are  employed,  and 
a  larger  number  of  working  families  are  provided  with  a  normal 
wage,  than  would  have  been  the  case  if  a  certain  number  of  men 
were  encouraged  to  an  unrestricted  energy  and  unlimited  over- 
time. In  the  long  run,  it  may  be  better  to  encourage  full  indi- 
vidual liberty  of  output,  even  in  the  interest  of  the  aggregate  of 
employment,  but  the  restraints  to  which  I  here  allude  become 
more  intelligible  when  they  are  regarded  as  attempts  to  enforce 
a  common  class  weekly  wage  by  means  of  an  even  distribution  of 
employment. 

A  minimum  piece-wage,  based  on  a  moderate  computation  of 
the  weekly  output  per  worker,  and  accompanied  by  a  substantial 
security  of  full  regular  employment,  would  in  effect  place  the 
piece-worker  in  the  position  of  a  salaried  employee.  But,  of 
course,  a  minimum  piece-wage,  however  high,  does  not  go  far 
to  this  end,  unless  security  of  tenure  at  fairly  full  employment  is 


THE  HUMAN  CLAIMS  OF  LABOUR  199 

obtained.  The  problem  of  un-  and  under-employment  and  of 
irregular  employment  is  now  beginning  to  be  recognised  in  its 
full  social  gravity.  A  weekly  wage  of  bare  efficiency  with  regular 
employment  is  socially  far  superior  to  a  higher  average  wage 
accompanied  by  great  irregularity  of  work.  The  former  admits 
stability  of  modes  of  living  and  ready  money  payments:  it  con- 
duces to  steadiness  of  character  and  provision  for  the  future  with- 
out anxiety.  Rapid  and  considerable  fluctuations  of  wages,  even 
with  full  employment,  are  damaging  to  character  and  stability 
of  standards:  but  irregularity  of  employment  is  the  most  de- 
structive agency  to  the  character,  the  standard  of  comfort,  the 
health  and  sanity  of  wage-earners.  The  knowledge  that  he  is 
liable  at  any  tune,  from  commercial  or  natural  causes  that  lie 
entirely  outside  his  control,  to  lose  the  opportunity  to  work  and 
earn  his  livelihood,  takes  out  of  a  man  that  confidence  in  the 
fundamental  rationality  of  life  which  is  essential  to  soundness 
of  character.  Religion,  ethics,  education,  can  have  little  hold 
upon  workers  exposed  to  such  powerful  illustrations  of  the  un- 
reason and  injustice  of  industry  and  of  society. 

The  regularisation  of  industry,  so  as  to  afford  substantial 
guarantees  of  full  regular  employment,  thus  ranks  with  the 
minimum  wage  as  the  most  substantial  contribution  towards  the 
substitution  of  salary  for  wages,  which  the  organic  law  of  Dis- 
tribution requires.  The  State  is  beginning  to  cooperate  with 
the  Labour  Movement  for  the  attainment  of  this  social  object, 
stimulating  employers  to  organise  their  industries  so  as  to  furnish 
a  more  even  volume  of  employment. 

§  6.  This  interpretation  of  the  Labour  Movement  as  a  half- 
conscious  manifold  endeavour  to  rescue  the  remuneration  of 
Labour  from  the  risks  and  defects  of  the  competitive  labour- 
ftiarket,  and  to  establish  it  on  an  economy  of  human  needs,  is 
not  fully  understood  without  some  further  reference  to  the  action 
of  organised  society.  The  Labour  Movement,  in  its  endeavour 
to  get  a  better  distribution  of  the  income,  is  not  confined  to 
trying  to  secure  a  satisfactory  minimum  or  standard  wage, 
fortified  by  greater  security  of  work  and  personal  insurance 
against  unemployment.  It  seeks  also  to  supplement  its  wages 
by  cooperative  and  public  provisions. 


2oo  WORK  AND  WEALTH 

The  cooperative  movement  is  an  attempt  to  convert  into  real 
wages  some  of  the  profits  of  employers  and  shareholders  in  manu- 
facturing and  commercial  businesses,  so  enlarging  the  proportion 
of  the  real  income  of  the  nation  which  goes  to  the  remuneration 
of  labour.  But  the  growing  attachment  of  the  Labour  Organisa- 
tions to  politics  is  equally  motived  by  the  endeavour  to  secure 
from  the  State,  not  merely  legal  supports  for  higher  wages  and 
improved  conditions  of  employment,  but  actual  supplements  to 
wages  in  the  shape  of  contributions  from  the  public  services  to 
their  standard  of  living.  Free  education,  old-age  pensions,  and 
public  subsidies  towards  insurance  are  a  direct  contribution  from 
the  State  to  the  higher  standard  of  life  which  modern  civilised 
society  demands.  Health,  education,  recreation,  and  provision 
against  emergencies,  are  coming  more  and  more  to  be  recognised 
as  proper  objects  of  governmental  action,  and  other  important 
services,  such  as  transport,  credit,  art,  music  and  literature,  are 
far  on  the  way  to  becoming  communal  supplies.  Although  these 
modes  of  social  provision  may  be  chiefly  motived  by  considera- 
tions of  public  health  and  other  common  goods,  they  neverthe- 
less must  rank  as  contributions  to  the  standard  of  comfort  and 
well-being  of  the  working-class  families  who  are  the  special  bene- 
ficiaries. Relieving,  as  they  do  in  many  instances,  the  private  in- 
comes of  the  workers  from  expenditure  which  otherwise  the 
family  would  find  it  to  its  private  interest  to  incur,  these  grow- 
ing public  services  form  a  genuine  and  a  considerable  contribution 
to  the  available  real  income  of  the  working-classes.  So  far  as 
by  taxation  direct  or  indirect  the  cost  of  such  public  services 
can  be  considered  a  burden  upon,  or  a  deduction  from  the  wage- 
income  of  the  workers,  it  forms,  of  course,  no  net  addition  to 
their  share,  but  is  only  a  public  control  over  methods  of  ex- 
penditure. But  inasmuch  as  the  distinct  tendency  of  modern 
taxation  is  toward,s  an  increasing  taxation  of  the  incomes  and 
property  of  the  non-working  classes,  these  public  services  rank 
as  supplementary  income,  paid  in  kind,  and  tending  to  equalise 
the  standard  of  living  of  individual  workers  and  grades  of  workers. 
The  criticism  sometimes  directed  against  this  State  socialism, 
upon  the  ground  that  it  tends  to  weaken  the  force  of  wage- 
bargaining  and  transfers  to  the  shoulders  of  'society'  costs  which 


CAI.MARA. 


THE  HUMAN  CLAIMS  OF  LABOUR  201 

employers  would  otherwise  have  to  bear  in  the  shape  of  higher 
money  wages,  would  have  considerable  force,  if  the  old  laissez- 
faire  principle  of  'free  contract'  were  allowed  otherwise  to  work 
unimpeded.  But  this,  as  we  see,  is  not  the  case.  The  growing 
policy  of  minimum  and  standard  rates,  supported  by  public 
opinion  and,  where  necessary,  by  public  law,  and  hardening 
into  a  policy  of  fixed  salaries,  is  nowise  inconsistent  with  a  simul- 
taneous development  of  communal  supplies  of  goods  and  services 
which  usually  lie  a  little  above  the  normal  standard  of  comfort 
of  those  who  are  the  chief  beneficiaries. 

The  growing  political  activities  of  a  labour  movement  which 
once  eschewed  State  aids  not  merely  attest  the  general  growth  of 
conscious  democracy  but  imply  a  recognition  of  the  direct  con- 
tribution which  the  State  is  making  towards  a  general  distribu- 
tion of  the  national  income  in  accordance  with  an  economy  of 
human  needs. 


CHAPTER  XIV 

SCIENTIFIC  MANAGEMENT 

§  i.  No  humanist  treatment  of  modern  industry  can  ignore 
the  recent  advances  of  scientific  methods  into  the  regulation 
both  of  standards  of  production  and  standards  of  consumption. 
In  both  arts  alike  the  crude  empiricism  of  the  past  is  giving  place 
to  a  more  ordered,  conscious  rationalism.  As  is  only  natural, 
the  advance  of  science  is  more  rapid  in  the  productive  arts. 

In  recent  years  many  scattered  attempts  have  been  made  to 
apply  physiology  and  psychology  to  economic  processes.  Busi- 
ness men  by  scientific  observation  and  experiment  have  brought 
criticism  to  bear  upon  the  traditional  and  empirical  modes  of 
organising  and  conducting  businesses.  The  more  or  less  hand- 
to-mouth  methods  which  were  possible  in  small  businesses  where 
the  manager  was  owner,  and  could  keep  a  close  personal  super- 
vision of  his  employees  and  all  their  work,  were  found  increasingly 
unsuitable  to  modern  types  of  large  capitalist  business.  It  was 
necessary  to  devise  regular  methods  for  correlating  the  work  of 
the  different  departments,  and  for  enabling  a  single  central  pur- 
pose to  operate  by  complex  delegation  through  several  grades  of 
subordinate  officials  with  automatic  checks  and  registers.  More 
accurate  methods  of  book-keeping,  especially  of  cost-taking, 
were  devised;  experiments  were  made  in  bonuses,  profit-sharing, 
fines,  pace-making  and  various  modifications  of  the  wage-systems 
applied  to  evoke  more  energy,  skill,  or  care  from  the  workers 
and  officials;  hours  of  labour  and  shift-systems  were  subjected 
to  measured  tests.  Still  more  recently  the  detailed  technology 
of  manual  and  mental  labour  has  been  made  material  of  physi- 
ological and  psychological  investigation.  Scientific  Manage- 
ment has  become  a  conscious  art.  Business  colleges  in  America 
and  Germany  give  courses  of  instruction  in  this  art,  and  a  new 
profession  has  arisen  of  expert  advisers  who  are  called  in  as 
specialists  to  diagnose  the  deficiencies  or  wastes  of  industrial  or 

202 


SCIENTIFIC  MANAGEMENT  203 

financial  power  in  particular  businesses  and  to  prescribe  reme- 
dies. 

Economic  progress,  regarded  from  the  standpoint  of  the  busi- 
ness man,  consists  in  getting  a  given  quantity  of  saleable  goods 
turned  out  at  a  lower  cost  of  production.  That  cost  of  production 
consists  of  the  salaries  and  wages  paid  to  various  grades  of  em- 
ployees for  mental  and  manual  labour,  cost  of  materials  and 
power,  standing  expenses  for  maintenance  of  plant  and  premises, 
including  replacement  and  insurance,  and  interest  upon  capital. 
Anything  that  reduces  any  one  of  these  costs,  without  a  cor- 
responding increase  of  another,  is  profitable  from  the  standpoint 
of  the  individual  employer,  or  of  all  employers  in  the  trade,  if  it 
be  generally  adopted,  or  of  the  consuming  public,  if  it  wholly  or 
partly  goes  to  them  in  lower  selling  prices.  Where  the  reduction 
of  costs  simply  takes  the  shape  of  reduced  wages  for  the  same 
work,  however,  it  causes  no  net  increase  of  concrete  wealth,  but 
merely  distributes  the  same  amount  (or  less  by  reason  of  reduced 
efficiency  of  labour)  in  a  different  manner.  Such  a  reduction 
cannot  then  be  regarded  as  economic  progress,  from  the  national 
standpoint. 

But  every  other  reduction  of  cost  carries  with  it  prima  facie 
evidence  of  a  net  increase  of  concrete  wealth.  Inventions  of 
machinery,  improved  chemical  or  other  treatment  of  materials, 
better  business  organisation  and  subdivision  of  labour,  improved 
skill  and  energy  in  employees,  better  book-keeping,  credit, 
marketing  arrangements, — all  such  technical  improvements 
promote  the  increase  of  concrete  wealth.  In  all  these  ways 
many  great  advances  have  been  made  in  various  industries.  But, 
alike  in  invention  and  in  organisation,  too  much  has  been  left 
to  chance,  or  to  the  pressure  of  some  emergency,  too  little  is  the 
result  of  ordered  thought.  Business  has  been  conducted  too 
much  in  the  spirit  of  an  art,  too  little  in  that  of  applied  science. 
The  modern  tendency  is  to  introduce  the  exacter  methods  of 
science.  The  modern  large  manufacturing  or  mining  enterprise 
employs  expert  engineers  and  chemists,  not  only  to  test  and 
control  the  operation  of  existing  processes,  but  to  invent  new 
and  cheaper  ways  of  carrying  out  a  process,  to  discover  new  pro- 
ducts and  new  uses  for  by-products.  It  employs  expert  account- 


204  WORK  AND  WEALTH 

ants  to  overhaul  its  book-keeping  and  finance  and  to  suggest 
improvements.  Initiative  and  economy  are  to  be  studied,  evoked 
and  applied  along  every  path. 

§  2.  But  until  lately  the  detailed  organisation  of  labour  and 
its  utilisation  for  particular  technical  processes  had  received 
little  attention  in  the  great  routine  industries.  Even  such  tech- 
nical instruction  as  has  been  given  to  beginners  in  such  trades 
as  building,  engineering,  weaving,  shoemaking,  etc.,  has  usually 
taken  for  granted  the  existing  tools,  the  accepted  methods  of 
using  them  and  the  material  to  which  they  are  applied.  To  make 
each  sort  of  job  the  subject-matter  of  a  close  analysis  and  of 
elaborate  experiment,  so  as  to  ascertain  how  it  could  be  done 
most  quickly  and  accurately  and  with  the  least  expenditure  of 
needless  energy,  comes  as  a  novel  contribution  of  business  enter- 
prise. To  get  the  right  man  to  use  the  right  tools  in  the  right 
way  is  a  fair  account  of  the  object  of  Scientific  Management. 
At  present  a  man  enters  a  particular  trade  partly  by  uninstructed 
choice,  partly  by  chance,  seldom  because  he  is  known  by  him- 
self and  his  employer  to  have  a  natural  or  acquired  aptitude  for 
it.  He  handles  the  tools  that  are  traditional  and  are  in  general 
use,  copying  the  ways  in  which  others  use  them,  receiving  chance 
tips  or  suggestions  from  a  comrade  or  a  foreman,  and  learning 
from  personal  experience  how  to  do  the  particular  work  in  a  way 
which  appears  to  be  least  troublesome,  dangerous,  or  exhausting. 
Both  mode  of  work  and  pace  are  those  of  prevailing  usage,  more 
or  less  affected  by  machinery  or  other  technical  conditions. 

The  scientific  manager  discovers  enormous  wastes  in  this  way 
of  working.  Part  of  the  waste  he  finds  due  to  improper  tools  and 
improper  modes  of  working,  arising  from  mere  ignorance;  part  he 
attributes  to  systematic  or  habitual  slacking,  more  or  less  con- 
scious and  intentional  on  the  part  of  the  workers.  The  natural 
disposition  of  the  worker  to  "take  it  easy"  is  supplemented  by  a 
belief  that  by  working  too  hard  he  deprives  some  other  worker 
of  a  job.  Scientific  Management,  therefore,  sets  itself  to  work 
out  by  experiment  the  exact  tool  or  machine  appropriate  to 
each  action,  the  most  economical  and  effective  way  by  which  a 
worker  can  work  the  tool  or  machine,  and  the  best  method  of 
selecting  workers  for  each  job  and  of  stimulating  them  to  perform 


SCIENTIFIC  MANAGEMENT  205 

each  action  with  the  greatest  accuracy  and  celerity.  By  means 
of  strictly  quantitative  tests  it  works  out  standard  tools,  standard 
methods  of  work  and  standard  tests  for  the  selection,  organisa- 
tion, stimulation,  and  supervision  of  the  workman. 

In  his  exposition  of  this  economy  l  Mr.  Taylor  takes  as  his 
simplest  illustration  of  choice  of  tools  the  'art'  of  shovelling. 
Left  to  himself,  or  working  with  a  gang,  the  shoveller  will  use 
a  shovel  whose  weight,  size,  and  shape  have  never  been  considered 
in  relation  to  the  particular  material  it  has  to  move  or  the  sort  of 
man  who  has  to  use  it.  '  By  first  selecting  two  or  three  first-class 
shovellers,  and  paying  them  extra  wages  for  doing  trustworthy 
work,  and  then  gradually  varying  the  shovel  load  and  having  all 
the  conditions  accompanying  the  work  carefully  observed  for 
several  weeks  by  men  who  were  accustomed  to  experimenting, 
it  was  found  that  a  first-class  man  would  do  the  biggest  day's 
work  with  a  shovel  load  of  about  21  pounds.' 2  As  a  result  of  this 
discovery,  instead  of  allowing  each  shoveller  to  choose  his  own 
shovel,  the  company  provided  eight  or  ten  different  kinds  of 
shovels  accommodated  to  the  weight  of  different  materials  and  to 
other  special  conditions.  Again,  thousands  of  stop-watch  obser- 
vations were  made  to  discover  how  quickly  a  labourer,  provided 
with  his  proper  shovel,  could  push  the  shovel  into  the  materials 
and  draw  it  out  properly  loaded.  A  similar  study  was  made  of 
'  the  time  required  to  swing  the  shovel  backward  and  then  throw 
the  load  for  a  given  horizontal  distance,  accompanied  by  a 
given  height. '  With  the  knowledge  thus  obtained  it  was  possible 
jfor  the  man  directing  shovellers,  first  to  teach  them  the  exact 
method  of  using  their  strength  to  the  best  advantage,  and  then 
to  assign  the  daily  task  by  which  they  could  earn  the  bonus  paid 
for  the  successful  performance  of  this  task.  For,  though  the 
skilled  director  can  prescribe  the  right  tool  and  the  right  method, 
he  cannot  get  the  required  result  without  the  willing  cooperation 
of  the  individual  worker.  For  this  purpose  a  bonus  is  applied, 
the  size  of  which  is  itself  a  subject  of  scientific  experiment.  The 
relation  of  this  bonus  to  the  ordinary  day  or  piece  wage  will  vary 
with  the  various  types  of  work  and  workers.  In  the  Bethlehem 

1  The  Principles  of  Scientific  Management  (Harper  &  Bros.). 

2  Op.  cit.,  p.  65. 


206  WORK  AND  WEALTH 

Steel  Works  it  was  found  that  the  best  effect  in  stimulating  energy 
was  got  by  a  bonus  of  about  60  per  cent,  beyond  the  wages 
usually  paid.  '  This  increase  in  wages  tends  to  make  them  not 
only  thrifty  but  better  men  in  every  way;  they  live  rather  better, 
begin  to  save  money,  become  more  sober,  and  work  more  steadily. 
When,  on  the  other  hand,  they  receive  much  more  than  a  60 
per  cent  increase  of  wages,  many  of  them  will  work  irregularly 
and  tend  to  become  more  or  less  shiftless,  extravagant,  and  dis- 
sipated. Our  experiments  showed,  in  other  words,  that  it  does 
not  do  for  most  men  to  get  rich  too  fast.' * 

Considering  that  it  was  claimed  that  the  result  of  this  new 
plan  of  work  was  to  raise  the  average  daily  output  per  man  from 
1 6  to  59  tons,  and  to  secure  an  annual  saving  in  the  labour-bill 
amounting  to  between  $75,000  and  $80,000,  it  would  have  been 
interesting  to  follow  the  effects  of  a  rapid  advance  of  wealth 
upon  the  dividend-receivers  who  gained  so  disproportionate  a 
share  of  the  advantages  of  the  new  economy. 

§  3.  So  far  as  the  selection  and  adaptation  of  tools  to  the 
special  conditions  of  the  work  are  concerned,  there  exists  no 
opposition  between  the  business  and  the  human  economy.  If  a 
shoveller  can  shovel  more  material  without  greater  exertion  by 
using  a  particular  shovel,  the  system  which  ensures  his  using  this 
shovel  is  beneficial  to  everybody,  assuming  that  he  gets  some 
share  of  the  value  of  the  increased  output.  When  we  turn  from 
a  simple  tool  to  more  elaborate  machinery,  it  becomes  evident 
that  quantitative  testing  is  capable  of  achieving  enormous 
technical  economies.  Mr.  Taylor  describes  the  gains  in  the  out- 
put of  metal-cutting  machines  made  by  means  of  such  economies. 
'  Its  pulling  power  at  the  various  speeds,  its  feeding  capacity,  and 
its  proper  speeds  were  determined  by  means  of  the  slide-rules, 
and  changes  were  then  made  in  the  countershaft  and  driving 
pulleys  so  as  to  run  it  to  its  proper  speed.  Tools,  made  of  high- 
speed steel  and  of  the  proper  shapes,  were  properly  dressed, 
treated  and  ground.  A  large  special  slide-rule  was  then  made, 
by  means  of  which  the  exact  speeds  and  feeds  were  indicated  at 
which  each  kind  of  work  could  be  done  in  the  shortest  possible 
time  in  this  particular  lathe.  After  preparing  in  this  way  so 
1  The  Principles  of  Scientific  Management,  p.  74. 


SCIENTIFIC  MANAGEMENT  207 

that  the  workman  should  work  according  to  the  new  method, 
one  after  another,  pieces  of  work  were  finished  in  the  lathe,  cor- 
responding to  the  work  which  had  been  done  in  our  preliminary 
trials,  and  the  gain  in  time  made  through  running  the  machine 
according  to  scientific  principles  ranged  from  two  and  one-half 
times  the  speed  in  the  slowest  instance  to  nine  times  the  speed  in 
the  highest'.1 

This  illustration,  however,  makes  it  evident  that  when  we 
pass  from  technical  improvements  of  tools  to  improved  methods 
of  working,  we  open  possibilities  of  opposition  between  the  busi- 
ness and  the  human  interest.  An  improvement  in  the  shape  or 
contour  of  the  *  cutting  edge '  for  a  particular  material  is  an  un- 
qualified gain.  So  is  a  discovery  as  to  the  ways  in  which  hard- 
ness or  softness  of  metals  affects  the  cutting  rate.  But  when  it  is 
a  question  of  evoking  from  the  workman  a  higher  pace  of  move- 
ment to  meet  the  requirements  of  the  speeded-up  machine,  no 
such  consistency  of  interests  can  be  assumed.  The  fact  that  by 
selection,  instruction,  and  minute  supervision,  workmen  can 
be  got  to  work  successfully  at  the  higher  speed,  and  regard  them- 
selves as  sufficiently  compensated  by  a  bonus  of  35  per  cent, 
does  not  settle  the  question  of  human  values.  So  far  as  the 
selective  process  simply  chooses  the  men  most  easily  capable  of 
working  at  a  higher  speed  and  of  eliminating  those  who  could 
not  easily  or  possibly  adapt  themselves  to  it,  no  net  increase  of 
human  cost  is  involved.  But  so  far  as  the  bonus  and  the  'ath- 
letic' spirit  which  it  is  used  to  evoke,2  induce  workmen  to  give 
out  an  amount  of  muscular  or  nervous  energy  injurious  to  them 
in  the  long  run,  the  human  cost  may  greatly  outweigh  both  the 
social  value  of  the  increased  output  and  the  utility  to  them  of 
higher  wages.  How  crucial  is  this  question  of  speeding-up  the 
human  labour  is  well  illustrated  by  the  experiments  in  bricklay- 
ing, by  means  of  which  the  bricklayers  engaged  on  straight  work, 
were  raised  from  an  average  of  120  bricks  per  man  per  hour  to 

1  The  Principles  of  Scientific  Management,  p.  100. 

z '  While  one  who  is  not  experienced  at  making  his  men  really  enthusiastic  in 
their  work  cannot  appreciate  how  athletic  contests  will  interest  the  men,  it  is  the  real 
secret  of  the  success  of  our  best  superintendents.  It  not  only  reduces  costs,  but  it 
makes  for  organisation  and  thus  saves  foremen's  time.'  F.  G.  Gilbreth,  Bricklaying 
System,  p.  13. 


208  WORK  AND  WEALTH 

350.  By  alterations  of  apparatus  Mr.  Gilbreth  dispenses  with 
certain  movements  which  bricklayers  formerly  considered  neces- 
sary, while  saving  time  in  the  actual  process  of  laying  by  using 
both  hands  at  the  same  time,  bricks  being  picked  up  with  the 
left  hand  at  the  same  instant  that  a  trowel  of  mortar  is  seized 
with  the  right. 

'It  is  highly  likely  that  many  times  during  all  of  these  years  individual 
bricklayers  have  recognised  the  possibility  of  eliminating  each  of  these 
unnecessary  motions.  But  even  if,  in  the  past,  he  did  invent  each  one  of 
Mr.  Gilbreth's  improvements,  no  bricklayer  could  alone  increase  his  speed 
through  their  adoption,  because  it  will  be  remembered  that  in  all  cases 
several  bricklayers  work  together  in  a  row  and  that  the  walls  all  around  a 
building  must  grow  at  the  same  rate  of  speed.  No  one  bricklayer,  then, 
can  work  much  faster  than  the  one  next  to  him.  Nor  has  any  workman  the 
authority  to  make  other  men  cooperate  with  him  to  do  faster  work.  It  is 
only  through  enforced  standardisation  of  methods,  enforced  adoption  of  the 
best  implements  and  working  conditions,  and  enforced  cooperation  that 
this  faster  work  can  be  assured.  And  the  duty  of  enforcing  the  adoption 
of  standards  and  of  enforcing  this  cooperation  rests  with  the  management 
alone.  The  management  must  supply  continually  one  or  more  teachers  to 
show  each  new  man  the  new  and  simpler  motions,  and  the  slower  men  must 
be  constantly  watched  and  helped  until  they  have  risen  to  their  proper 
speed.  All  of  those  who,  after  teaching,  either  will  not  or  cannot  work  in 
accordance  with  the  new  methods  and  at  the  higher  speed,  must  be  dis- 
charged by  the  management.  The  management  must  also  recognise  the 
broad  fact  that  workmen  will  not  submit  to  this  more  rigid  standardisation 
and  will  not  work  extra  hard,  unless  they  receive  extra  pay  for  doing  it.'1 

This  makes  it  clear  that,  though  part  of  the  larger  output,  or 
increased  speed,  is  got  by  improved  arrangements  or  methods  of 
work  that  need  not  tax  the  workers'  powers,  part  of  it  does  in- 
volve their  working  "extra  hard."  Not  only  a  better  direction 
but  a  larger  amount  of  energy  is  required  of  them,  with  an  in- 
crease of  wear  and  tear  and  of  fatigue.  It  is  an  unsettled  point 
of  great  importance,  how  much  of  the  enlarged  output  can  be 
imputed  to  the  former,  how  much  to  the  latter.  Even  more  im- 
portant is  the  allusion  in  the  passage  just  quoted  to  'the  rigid 
standardisation '  to  which  workmen  will  not  submit,  unless  they 
are  well  paid  to  do  so.  For  this  rigid  standardisation  of  the  work 
involves  a  corresponding  mechanisation  of  the  workmen.  Men 
who  formerly  exercised  a  certain  amount  of  personal  choice  in  the 
details  of  their  work,  as  regards  action  and  time,  must  abandon 

1  The  Principles  of  Scientific  Management,  p.  83. 


SCIENTIFIC  MANAGEMENT  209 

this  freedom  and  follow  exactly  the  movements  prescribed  to 
them  by  the  taskmaster  with  a  chart  and  a  stop-watch.  He 
will  prescribe  the  particular  task  for  each,  the  tool  he  shall  use, 
the  way  he  shall  use  it,  the  intervals  of  work  and  rest,  and  will 
take  close  note  of  every  failure  to  conform.  The  liberty,  initia- 
tive, judgment,  and  responsibility  of  the  individual  workman  are 
reduced  to  a  minimum. 

This  is  admitted  by  the  advocates  of  Scientific  Management, 
though  in  a  qualified  manner.  One  of  the  elements  of  success  is 
said  to  be:  'An  almost  equal  division  of  the  work  and  responsi- 
bility between  the  workman  and  the  management.  All  day  long 
the  management  work  almost  side  by  side  with  the  men,  helping, 
encouraging  and  smoothing  the  way  for  them,  while  in  the  past 
they  stood  on  one  side,  gave  the  men  but  little  help,  and  threw 
on  to  them  the  entire  responsibility  as  to  methods,  implements, 
speed,  and  harmonious  cooperation.'1  But  in  the  broader  dis- 
cussion of  the  difference  between  the  ordinary  business  method 
and  Scientific  Management,  in  relation  to  the  numerous  little 
problems  that  arise  in  every  kind  of  work,  we  are  told  that, 
'the  underlying  philosophy  of  this  (ordinary)  management  nec- 
essarily leaves  the  solution  of  all  these  problems  in  the  hands  of 
each  individual  workman,  while  the  philosophy  of  Scientific 
Management  places  their  solution  in  the  hands  of  the  manage- 
ment.'2 Elsewhere  3  it  is  stated  that  Scientific  Management 
'involves  the  establishment  of  many  rules,  laws,  and  formulas 
which  replace  the  judgment  of  the  individual  workman.' 

§  4.  Now  in  endeavouring  to  apply  to  this  policy  of  Scientific 
Management  a  standard  of  human  welfare,  we  are  confronted  by 
three  questions: — 

(1)  What  is  the  effect  of  this  policy  upon  the  human  costs  of 

labour? 

(2)  How  far  will  any  increase  of  human  costs  of  labour  be 

offset  by  the  greater  human  utility  of  the  higher  wages 
they  receive? 

(3)  How  far  is  any  balance  of  human  costs,  which  is  imposed 

on  special  classes  of  producers,  compensated  by  the  in- 
creased wealth  at  the  disposal  of  society  at  large? 
1  Taylor,  p.  85.  2  Op.  cit.,  p.  103.  3  Op.  cit.,  p.  37. 


2io  WORK  AND  WEALTH 

There  is  some  tendency  among  the  advocates  of  Scientific 
Management  to  burke  a  full  discussion  of  these  issues  by  as- 
serting that  their  policy  is  only  a  fuller  and  more  rational  appli- 
cation of  that  principle  of  division  of  labour  which  is  by  general 
consent  the  economic  foundation  of  modern  civilised  society. 
If  some  sacrifice  of  individual  freedom  in  industrial  work  is  in- 
volved, it  is  assumed  to  be  more  than  compensated  by  gains  to 
society  in  which  every  individual,  as  a  member  of  society,  has 
his  proper  share. 

But  we  cannot  consent  thus  to  rush  the  issue.  For  it  may 
turn  out  that  the  new  method,  though  but  a  stricter  and  finer 
application  of  the  old,  carries  this  economy  so  far  that  the  in- 
creased human  costs  imposed  upon  the  producer  grow  faster 
than  the  human  gains  which  the  increased  productivity  confers 
either  upon  him  or  upon  society  at  large.  In  other  words,  the 
human  indictment  brought  by  the  mid- Victorian  humanists 
against  the  factory  system  of  their  day  and  rejected  on  a  general 
survey  of  the  economic  situation,  might  be  validated  by  the 
increased  standardisation  and  specialisation  of  labour  under 
scientific  management.  For  though  the  division  of  labour  under 
modern  capitalism  in  all  its  branches  has  narrowed  the  range  of 
productive  activity  for  the  great  bulk  of  workers,  a  survey  of 
those  activities  shows  that  within  their  narrowing  range  there 
may  and  does  survive  a  certain  scope  for  skill,  judgment,  and 
initiative,  a  certain  limited  amount  of  liberty  in  detailed  modes 
of  workmanship.  Moreover,  the  conditions  of  most  organised 
work  form  a  certain  education  in  discipline  and  responsibility. 
It  is  only  a  small  proportion  of  the  workers  who  are  converted 
into  mere  servants  of  the  machine.  Though  large  classes  are 
engaged  in  monotonous  routine,  the  paces  and  the  detailed 
movements  are  not  rigidly  enforced  upon  them.  Different  work- 
men will  be  doing  the  same  work  in  a  slightly  different  way. 

Now  the  standardisation  under  the  new  method  is  expressly 
designed  so  as  to  extirpate  these  little  personal  equations  of 
liberty  and  to  reduce  the  labour  of  the  ordinary  employee  to  an 
automatic  perfection  of  routine.  It  is,  indeed,  contended  by 
Mr.  Taylor  that  the  knowledge  of  each  man  that  he  is  working 
at  his  highest  personal  efficiency  will  be  a  satisfaction  to  him, 


SCIENTIFIC  MANAGEMENT  211 

that  the  attention  he  must  pay  to  the  detailed  orders  of  the  task- 
master will  evoke  intelligence  and  responsibility,  and  that  his 
initiative  in  the  way  of  suggesting  improvements,  which  has 
hitherto  been  prized  as  an  element  of  liberty  and  a  source  of 
industrial  progress,  can  be  conserved  under  scientific  manage- 
ment. But  a  careful  examination  of  the  illustrations  of  the 
method  compels  our  rejection  of  these  claims.  The  knowledge 
of  a  routine  worker  that  he  is  speeded  up  to  his  highest  pitch  by 
a  method  whose  efficiency  is  prescribed  by  others,  does  not  yield 
a  sense  of  personal  efficiency.  Mere  meticulous  obedience  is  not 
a  proper  training  in  the  discipline  of  a  'person',  and  a  workman 
operating  under  these  conditions  will  not  have  the  practical 
liberty  for  those  little  experiments  in  trial  and  error  on  his  own 
account  which  makes  his  suggestions  of  improvement  fruitful. 
Mr.  Taylor,  however,  carries  his  defence  so  far  as  to  deny  all 
narrowing  effects  of  subdivision  of  labour  on  the  worker.  Ad- 
mitting that  the  workmen  frequently  say  when  they  first  come 
under  the  system,  'Why,  I  am  not  allowed  to  think  or  move 
without  someone  interfering  or  doing  it  for  me/  he  seems  to 
think  the  following  answer  satisfactory: — 

'The  same  criticism  and  objection,  however,  can  be  raised  against  any 
other  modern  sub-division  of  labour.  It  does  not  follow,  for  example,  that 
the  modern  surgeon  is  any  more  narrow  or  wooden  a  man  than  the  early 
settler  in  this  country.  The  frontiersman,  however,  had  to  be  not  only  a 
surgeon,  but  also  an  architect,  house-builder,  lumber-man,  farmer,  soldier, 
and  doctor,  and  he  had  to  settle  his  lawsuits  with  a  gun.  You  would  hardly 
say  that  the  life  of  the  modern  surgeon  is  any  more  narrowing  or  that  he  is 
more  of  a  wooden  man  than  the  frontiersman.  The  many  problems  to  be 
met  and  solved  by  the  surgeon  are  just  as  intricate  and  difficult  and  as 
developing  and  broadening  in  their  way  as  were  those  of  the  frontiersman.'  1 

Now  as  to  this  we  can  only  reply,  first  that  it  is  untrue  that 
the  surgeon's  life  on  its  productive  side  (the  issue  under  discus- 
sion) is  as  broad  and  as  varied  as  that  of  the  frontiersman.  In  the 
second  place,  even  if  we  accepted  the  view  that  a  narrow  field  of 
activity  admitted  of  as  much  variety  and  interest  as  a  wider 
field,  provided  liberty  of  action  were  equal  in  the  two,  that  view 
is  quite  inapplicable  to  the  case  at  issue.  For  there  all  liberty 
of  action  in  the  subdivided  field  of  labour  is  excluded. 

1  Taylor,  p.  126. 


2«  WORK  AND  WEALTH 

§  5.  So  far,  then,  as  initiative,  interest,  variation,  experiment, 
and  personal  responsibility  are  factors  of  human  value,  qualify- 
ing the  human  costs  of  labour,  it  seems  evident  that  Scientific 
Management  involves  a  loss  or  injury  to  the  workers.  Are  there, 
however,  any  personal  considerations,  apart  from  wages,  that 
may  be  taken  as  an  offset?  Suppose  that  workers  can  be  found 
of  a  dully  docile  character  with  a  large  supply  of  brute  muscular 
energy,  will  any  harm  be  done  them  by  utilising  them  to  carry 
pig-iron  or  to  shovel  earth  under  "scientific"  supervision?  Mr. 
Taylor  has  an  interesting  passage  bearing  on  this  question: 
'Now  one  of  the  very  first  requirements  for  a  man  who  is  fit  to 
handle  pig-iron  as  a  regular  occupation  is  that  he  shall  be  so 
stupid  and  so  phlegmatic  that  he  more  nearly  resembles  in  his 
mental  make-up  the  ox  than  any  other  type.' 1  These  ox-like 
men,  it  may  be  held,  do  not  really  suffer  any  injury,  undergo  any 
human  cost,  by  having  no  opportunity  furnished  them  for  exer- 
cising faculties  and  activities  of  mind  which  they  do  not  possess 
and  are  unlikely  to  acquire.  If  then,  in  every  grade  of  workers, 
there  are  to  be  found  enough  men  who  appear  destined  by  nature 
for  a  rigidly  mechanical  task  conducted  under  servile  conditions, 
it  may  be  thoroughly  sound  social  economy  to  put  them  to  per- 
form all  labour  of  such  kind  as  is  required  for  the  supply  of  human 
needs. 

This  is  a  problem  of  applied  psychology,  or  of  psycho-physi- 
ology. Professor  Miinsterberg,  in  a  recent  volume,2  makes  a 
contribution  towards  its  solution,  and  towards  a  finer  art  of 
Scientific  Management  than  that  which  has  been  evolved  by 
business  men.  For  since  all  industry  primarily  involves  the 
voluntary  ordered  application  of  human  faculties  to  manual 
and  mental  actions,  the  psychologist  must  be  in  a  position  to 
give  important  advice  in  all  economic  operations.  For  he  alone 
is  qualified  by  scientific  tests  to  discover  and  estimate  the  various 
mental  capacities  which  count  for  success  in  industry,  to  ascer- 
tain how  they  cooperate  and  conflict,  and  how  they  may  be  best 
applied  to  the  performance  of  the  various  operations  in  each  pro- 
cess. Attention,  memory,  ideas,  imagination,  feeling,  volition, 
suggestibility,  ability  to  learn,  ability  to  discriminate,  judgment, 
1  Taylor,  p.  59.  2  Psychology  and  Industrial  Efficiency. 


SCIENTIFIC  MANAGEMENT  213 

space-sense,  time-sense,  and  other  mental  qualities,  enter  in 
varying  measures  as  factors  of  industrial  ability.  Economic 
psychology  may,  it  is  contended,  increase  the  efficiency  of  in- 
dustry in  three  ways. 

'We  ask  how  we  can  find  the  men  whose  mental  qualities  make  them  best 
fitted  for  the  work  they  have  to  do;  secondly,  under  what  psychological 
conditions  we  can  secure  the  greatest  and  most  satisfactory  output  of  work 
from  every  man;  and  finally,  how  we  can  produce  most  completely  the  in- 
fluences on  human  minds  which  are  desired  in  the  interests  of  business. 
In  other  words,  we  ask  how  to  find  the  best  possible  man,  how  to  produce 
the  best  possible  work,  and  how  to  secure  the  best  possible  effects.' 1 

The  first  of  these  services,  fitting  the  man  to  the  job,  involves 
a  double  psychological  enquiry,  first  into  the  vocational  needs, 
and  secondly  into  the  personal  ability  of  each  applicant  to 
meet  these  needs.  We  must  examine  the  task  to  learn  what 
combination  of  mental  qualities  in  the  employee  is  required  to 
do  it  well,  and  we  must  examine  each  applicant  for  such  work  to 
learn  whether  he  possesses  the  requisite  qualities. 

Two  illustrations  will  serve  to  indicate  what  is  meant.  The 
problem  of  selecting  fit  motor-men  for  electric  railways  was 
brought  to  Professor  Miinsterberg's  attention.  To  drive  fast 
and  at  the  same  time  avoid  accidents  were  the  requirements  of 
the  companies.  Fitness  for  this  purpose  he  found  to  centre  in 
a  single  mental  process: — 

'I  found  this  to  be  a  particular  complicated  act  of  attention  by  which  the 
manifoldness  of  objects,  the  pedestrians,  the  carriages,  and  the  automobiles, 
are  continuously  observed  with  reference  to  their  rapidity  and  direction  in 
the  quickly-changing  panorama  of  the  streets.  Moving  figures  come  from 
the  right  and  from  the  left  towards  and  across  the  track,  and  are  embedded 
in  a  stream  of  men  and  vehicles  which  moves  parallel  to  the  track.  In  the 
face  of  such  manifoldness  there  are  men  whose  impulses  are  almost  inhibited 
and  who  instinctively  desire  to  wait  for  the  movement  of  the  nearest  objects; 
they  would  evidently  be  unfit  for  service,  as  they  would  drive  the  electric 
car  far  too  slowly.  There  are  others  who,  even  with  the  car  at  full  speed, 
can  adjust  themselves  for  a  time  to  the  complex  moving  situation,  but 
whose  attention  soon  lapses,  and  while  they  are  fixating  a  rather  distant 
carriage,  may  overlook  a  pedestrian  who  carelessly  crosses  the  track  im- 
mediately in  front  of  this  car.  In  short,  we  have  a  great  variety  of  mental 
types  of  this  characteristic  unified  variety,  which  may  be  understood  as  a 
particular  combination  of  attention  and  imagination. '  * 

1  Op.  cit.,  p.  23.  z  Op.  cit.,  p.  66. 


2i4  WORK  AND  WEALTH 

An  apparatus  was  devised,  representing  the  psychological 
conditions  involved  in  the  actual  problem,  not  a  mere  miniature, 
but  an  adaptation  which  should  call  out  and  test  the  same  mental 
qualities.  A  number  of  actual  motor-men  were  then  carefully 
examined  in  the  working  of  this  apparatus  so  as  to  test  the 
amounts  of  speed  and  accuracy  and  the  relation  between  the 
two.  Quantitative  estimates  were  thus  reached  of  fitness  in 
working  the  apparatus,  values  being  assigned  respectively  to 
speed  and  accuracy.  In  this  way  a  psychological  standard  of 
fitness  was  attained,  such  as  would  be  available  for  selecting 
applicants  for  the  motor  service.  So  in  ship-service,  where 
everything  may  turn  upon  prompt  and  accurate  handling  of  a 
sudden  complicated  emergency.  Ship  officers  are  found  whom 
a  sudden  danger  paralyses,  or  keeps  vacillating  until  it  is  too 
late.  Others,  feeling  only  the  urgency  of  prompt  action,  jump 
to  a  too  hasty  decision.  The  desirable  type  is  '  the  men  who  in 
the  unexpected  situation  quickly  review  the  totality  of  the 
factors  in  their  relative  importance  and  with  almost  instinctive 
certainty  immediately  come  to  the  same  decision  to  which  they 
would  have  arrived  after  great  thought.' 1  Here  again  it  was 
possible  to  conduct  a  series  of  experiments,  testing  the  mental 
processes  and  measuring  the  degrees  of  rapidity,  correctness, 
and  constancy. 

Other  tests  can  be  applied  for  the  qualities  desirable  in  such 
work  as  the  telephone  service,  in  which  memory,  attention, 
intelligence,  exactitude,  and  rapidity  are  involved.  Sometimes 
the  mental  qualities  can  be  separately  tested,  sometimes  their 
inter-relation  is  such  as  to  require  a  simultaneous  testing. 

§  6.  It  is  equally  obvious  that  a  good  deal  can  be  done  to 
increase  the  productive  efficiency  of  those  who  have  been  se- 
lected for  any  work,  by  methods  of  teaching  that  involve  psy- 
chological guidance.  In  learning  such  processes  as  typewriting 
and  telegraphy,  for  instance,  much  can  be  achieved  by  technical 
adjustments  of  movement  such  as  we  have  already  described, 
and  by  considered  adaptations  of  machine  and  materials  to 
suit  human  faculties.  But  methods  of  improving  memory  and 
securing  a  more  regular  and  accurate  attention,  of  increasing 

1  Op.  cit.,  p.  85. 


SCIENTIFIC  MANAGEMENT  215 

the  rapidity  of  repeated  actions  with  the  least  nervous  wear 
and  tear,  of  educating  delicacy  of  touch  and  sight  for  specific 
purposes,  the  utilisation  of  rhythmic  tendencies,  the  proper 
balance  of  intervals  of  work  and  rest,  the  influence  of  imitation 
and  social  cooperation  in  gang  labour,  and  finally  the  effects  of 
different  quantities  and  modes  of  remuneration  in  evoking  and 
maintaining  the  various  factors  of  efficiency — all  such  considera- 
tions offer  a  fruitful  field  for  psychological  investigation. 

Hence  psychology,  it  is  urged,  can  contribute  greatly  to  pro- 
ductivity by  finding  the  best  man  for  each  job  and  adjusting 
his  mental  equipment  to  conditions  of  work  which  in  their  turn 
can  be  modified  to  fit  his  powers.  But,  regarding  production  as 
designed  to  satisfy  human  demands,  psychology  can  be  utilised 
also  to  assist  in  getting  the  right  quantities  and  qualities  of 
goods  to  the  right  persons.  Commercial  organisation  exists  for 
this  purpose.  It  does  study  the  wants  and  demands  of  con- 
sumers. But  it  might  do  so  with  more  'science'.  Professor 
Miinsterberg  makes  an  exceedingly  interesting  study  of  the  arts 
of  advertising  and  of  selling  over  the  counter,  to  illustrate  how 
much  might  be  done  by  substituting  experimental  laws  for  in- 
stinctive and  traditional  practices.  One  comment  upon  this 
application  of  his  science,  however,  is  called  for.  Though  the 
social-economic  view  would  oblige  the  psychologist  to  approach 
the  subject  specifically  from  the  standpoint  of  the  consumer 
and  the  psychology  of  satisfactions  in  his  standard  of  comfort, 
Professor  Miinsterberg  virtually  confines  himself  to  the  psy- 
chology of  commerce  and  of  marketing  regarded  from  the  stand- 
point of  the  manufacturer  or  merchant. 

Thus  psychology  can  be  made  to  devise  and  prescribe  econo- 
mies of  human  power  in  industry,  which,  like  the  technical  im- 
provements of  Scientific  Management,  would  seem  to  increase 
greatly  the  productivity  of  industry,  turning  out  larger  quanti- 
ties, and  perhaps  better  qualities,  of  goods,  with  the  same  amount 
of  labour. 

§  7.  What  would  be  the  human  valuation  of  these  processes 
of  scientific  economy?  Assuming  that  this  economy  fructifies 
in  an  enlarging  volume  of  wealth,  it  would  appear  to  be  accom- 
panied by  an  increase  of  welfare,  unless  the  human  costs  of  labour 


216  WORK  AND  WEALTH 

were  correspondingly  increased,  or  the  distribution  of  the  larger 
volume  of  wealth  were  made  so  much  more  unequal  that  it  fur- 
nished a  smaller  volume  of  utility  in  its  consumption.  Neither 
of  these  qualifications  is,  indeed,  excluded  by  the  terms  of  the 
economy.  For  each  stroke  of  Scientific  Management  is  pri- 
marily justified  as  a  profit-making  device,  advantageous  to  the 
capitalist-employer  in  a  particular  business.  It  enables  him  to 
turn  out  goods  at  a  lower  labour-cost  and  so  to  make  a  larger 
margin  of  profit  on  their  sale.  If  we  suppose  this  economy  to 
be  of  wide  or  general  adoption,  it  would  be  equivalent  to  an  all- 
round  increase  in  the  technical  efficiency  of  labour.  Unless  we 
suppose  the  aggregate  quantity  of  production  to  be  a  fixed 
quantity  (a  supposition  not  in  accordance  with  experience),  it 
would  seem  to  follow  that  at  least  as  large  a  quantity  of  this 
more  efficient  labour  would  be  employed  in  turning  out  an  in- 
creased volume  of  goods.  In  that  event,  it  would  be  possible 
that  the  workers,  as  well  as  the  capitalist  employers,  should  enjoy 
a  higher  rate  of  remuneration.  Whether  they  would  do  so, 
however,  and  to  what  extent,  seems  quite  uncertain.  For  though 
the  payment  of  a  considerable  bonus  in  addition  to  current  wages 
was  necessary  in  the  experiments  described  by  Mr.  Taylor,  in 
order  to  evoke  from  a  particular  group  of  workers  submission  to 
the  new  terms  of  work,  it  does  not  follow  that,  once  adopted  by 
all  employers  in  the  trade,  the  method  would  entail  or  even 
permit  a  continuance  of  this  higher  pay.  For  the  pioneer  firm 
admittedly  pays  the  bonus  partly  in  order  to  overcome  the  pains 
and  scruples  of  workers  subjected  to  a  speeding-up  system.  If 
it  did  not  pay  a  bonus,  the  workers  would  quit  this  employment 
for  some  other  that  was  open  to  them.  But  if  no  other  employ- 
ment upon  the  old  terms  were  open,  this  part  of  the  bonus  might 
be  unnecessary  as  an  inducement.  Even  that  part  of  the  bonus 
which  seems  to  be  directed  to  stimulate  the  ambition  and  energy 
of  the  individual  worker,  and  to  break  up  the  habitual  slackness 
of  the  group  and  its  regulation  stroke,  would  seem  to  stand  on  a 
precarious  footing,  when  the  new  method  of  work  was  once  well 
established  and  itself  became  a  habit.  Only  that  part,  if  any, 
of  the  bonus,  or  higher  wage,  which  was  necessary  to  replace  the 
greater  muscular  or  nervous  wear  and  tear  of  the  speeded-up 


SCIENTIFIC  MANAGEMENT  217 

and  more  automatic  work,  would  necessarily  survive.  It  would 
stand  as  a  necessary  cost  of  production.  If,  however,  as  Mr. 
Taylor  and  Professor  Miinsterberg  appear  to  hold,  the  scientific 
management  need  entail  no  such  additional  wear  and  tear,  there 
seems  no  ground  for  holding  that,  after  the  method  became 
general,  any  bonus  to  the  workers  would  be  necessary.  And  if 
it  were  unnecessary,  it  would  not,  indeed  under  competitive 
terms  could  not,  be  paid.  On  this  hypothesis,  the  additional 
wealth  created  by  the  improved  efficiency  of  the  system  might 
go  entirely  to  capital.  Indeed,  so  far  as  the  determination  were 
left  to  individual  bargaining,  this  result  would  appear  almost 
inevitable.  For  the  greater  average  efficiency  of  labour  would  be 
equivalent  to  a  larger  supply  of  labour  (though  it  might  also 
mean  a  better  quality),  and  since  no  immediate  or  corresponding 
increase  of  demand  for  labour  need  accrue,  the  price  per  unit  of 
labour  would  fall.  This  would  mean  that  the  labourer  would 
get  no  higher  payment  for  his  higher  productivity.  Even  if  the 
increasing  rate  and  amount  of  profits  brought  increased  saving 
and  larger  masses  of  competing  capital,  it  would  still  seem  doubt- 
ful whether  the  aggregate  demand  for  labour  would  be  found  to 
keep  pace  with  the  growth  of  the  supply  which  scientific  manage- 
ment plus  psychological  selection  would  yield. 

Though,  therefore,  the  aggregate  product  increased,  it  remains 
doubtful  whether  any  considerable  share  of  the  increase  must  or 
would  go  to  labour.  But  suppose  that  organisation  of  labour  or 
social  intervention  were  able  to  secure  some  considerable  rise 
of  real  wages  from  the  enlarged  product,  so  that  as  consumers  the 
workers  were  better  off,  the  human  value  of  the  process  is  not 
yet  established.  Two  related  questions  still  remain  for  settle- 
ment. First,  that  already  tentatively  raised,  the  question 
whether  the  workers  may  not  suffer  more  from  increased  human 
costs  of  production  under  the  new  scientific  regime  than  they 
gain  in  human  utilities  of  consumption.  Some  of  the  'science' 
in  its  application  would  indeed  appear  to  be  wholly  beneficial. 
The  improved  methods  of  selecting  and  of  training  labour,  so  as 
to  get  the  best  man  for  each  job,  and  to  enable  him  to  do  his  work 
in  the  best  way,  is  pure  gam,  provided  that  best  way  does  not 
unduly  strain  his  energy  or  dull  his  mind.  Other  elements  of 


2i8  WORK  AND  WEALTH 

applied  psychology  are  more  doubtful  in  their  net  effect.  The 
practices  of  scientific  advertising  and  of  suggestive  selling  have 
very  little  proved  utility  and  are  nearly  as  likely  to  be  applied 
to  force  the  wrong  articles  on  the  wrong  purchasers  as  to  distrib- 
ute wealth  along  the  lines  of  its  maximum  utility  for  consump- 
tion. The  persons  engaged  for  a  livelihood  in  palming  off  goods 
on  a  public  irrespective  of  any  intrinsic  merits  they  contain,  pay 
a  heavy  toll  in  character  for  the  work  they  are  called  upon 
to  do. 

§  8.  But,  turning  to  the  main  problem,  there  remains  the  issue 
of  the  increased  mechanisation,  or  standardisation,  of  the  worker 
under  Scientific  Management.  Admitting  that  a  certain  amount 
of  subdivision  of  labour,  and  of  diminishing  variety,  interest  and 
initiative,  accruing  therefrom,  is  justified  in  a  human  sense  by 
the  benefits  of  enhanced  production,  is  there  any  limit  to  this 
economy,  and  if  there  be,  is  that  limit  transgressed  under  Scien- 
tific Management?  The  question  does  not  admit  perhaps  of 
any  general  or  certain  answer.  Suppose  it  be  admitted,  as  I 
think  it  must,  that  every  application  of  this  Scientific  Manage- 
ment does  squeeze  out  of  the  labour-day  some  human  interest, 
some  call  upon  initiative,  reason,  judgment,  responsibility, 
surviving  under  previous  conditions  even  in  the  most  routine 
and  subdivided  toil,  must  we  necessarily  regard  this  loss  as  a 
heavy  increased  human  cost  of  labour?  Surely  it  depends  upon 
the  particular  labour  in  question.  In  some,  perhaps  most, 
branches  of  heavy  routine  toil,  the  shreds  of  human  interest, 
the  calls  on  personality,  are  usually  so  trifling  that  it  seems 
absurd  to  take  them  into  much  account.  The  work  of  carrying 
pig-iron,  or  of  shovelling  continually  the  same  material,  con- 
tains so  little  scope  for  the  play  of  initiative,  responsibility,  etc., 
that  any  such  regimentation  as  is  described  can  hardly  be  said 
to  damage  the  quality  of  the  work  or  the  character  of  the  worker 
as  affected  by  his  work.  If  a  higher  efficiency  and  a  larger  out- 
put can  enable  a  smaller  number  of  workmen  to  be  kept  on  labour 
of  so  low  a  grade,  there  ought  to  be  a  net  social  gain.  But  there 
is  another  compensation  possible  for  any  loss  of  liberty,  or  in- 
crease of  monotony,  involved  in  Scientific  Management.  If  it 
be  accompanied  by  a  shortening  of  the  hours  of  labour,  the 


SCIENTIFIC  MANAGEMENT  219 

damage  inflicted  by  the  rigour  of  mechanical  discipline  may  be 
compensated  by  a  larger  leisure.  This  compensation,  of  course, 
is  reduced  or  even  nullified,  if  the  greater  intensity  of  labour  in 
the  shorter  day  takes  more  out  of  the  man,  as  often  happens, 
than  was  taken  out  before.  But,  assuming  that  this  is  not  the 
case,  and  that  for  a  longer  dull  routine  work-day  is  substituted 
a  shorter  but  even  more  mechanical  day,  a  net  gain  for  labour  is 
still  possible.  I  am  disposed  to  hold  that  a  good  case  might  be 
made  out  for  Scientific  Management  as  regards  those  orders  of 
routine  labour  which,  as  ordinarily  carried  on,  contain  very 
little  interest  or  humanity.  Even  then,  however,  there  is  a 
danger  that  deserves  attention.  If  this  regimentation  can  re- 
duce the  cost  per  unit  of  dull,  heavy  muscular  toil,  as  is  likely, 
it  may  prevent  the  discovery  and  application  of  wholly  mechan- 
ical substitutes  for  this  work. 

But  the  human  economy  is  far  more  doubtful  in  the  case  of 
labour  which,  though  subdivided  and  mainly  of  a  routine  char- 
acter, still  contains  a  margin  for  the  display  of  skill,  initiative 
and  judgment.  To  remove  these  qualities  altogether  from  such 
work  and  to  vest  them,  as  is  proposed,  not  even  in  the  over- 
seers, but  in  a  little  clique  of  scientific  experts,  would  mean  the 
conversion  of  large  bodies  of  skilled,  intelligent  workers  into 
automatic  drudges.  The  life  and  character  of  these  men  would 
suffer  as  an  inevitable  reaction  of  this  drudgery,  and  it  is  doubt- 
ful whether  a  somewhat  shortened  work-day  and  somewhat 
higher  wages  would  compensate  such  damage.  While  we  may 
recognise  the  general  desirability  of  division  and  specialisation 
of  labour,  some  detailed  liberty  and  flexibility  should  be  left  to  the 
worker. 

§  9.  Indeed,  were  the  full  rigour  of  Scientific  Management  to 
be  applied  throughout  the  staple  industries,  not  only  would  the 
human  costs  of  labour  appear  to  be  enhanced,  but  progress  in 
the  industrial  arts  itself  would  probably  be  damaged.  For  the 
whole  strain  of  progress  would  be  thrown  upon  the  Scientific 
Management  and  the  consulting  psychologist.  The  large  assist- 
ance given  to  technical  invention  by  the  observation  and  ex- 
periments of  intelligent  workmen,  the  constant  flow  of  sug- 
gestion for  detailed  improvements,  would  cease.  The  elements 


220  WORK  AND  WEALTH 

of  creative  work  still  surviving  in  most  routine  labour  would 
disappear.  On  the  one  hand,  there  would  be  small  bodies  of 
efficient  taskmasters  carefully  administering  the  orders  of  expert 
managers,  on  the  other,  large  masses  of  physically  efficient  but 
mentally  inert  executive  machines.  Though  the  productivity 
of  existing  industrial  processes  might  be  greatly  increased  by 
this  economy,  the  future  of  industrial  progress  might  be  im- 
perilled. For  not  only  would  the  arts  of  invention  and  improve- 
ment be  confined  to  the  few,  but  the  mechanisation  of  the  great 
mass  of  workmen  would  render  them  less  capable  of  adapting 
their  labour  to  any  other  method  than  that  to  which  they  had 
been  drilled.  Again,  such  automatism  in  the  workers  would  react 
injuriously  upon  their  character  as  consumers,  damaging  their 
capacity  to  get  full  human  gain  out  of  any  higher  remuneration 
that  they  might  obtain.  It  would  also  injure  them  as  citizens, 
disabling  them  from  taking  an  intelligent  part  in  the  arts  of 
political  self-government.  For  industrial  servitude  is  inimical 
to  political  liberty.  It  would  become  even  more  difficult  than 
now  for  a  majority  of  men,  accustomed  in  their  work-day  to 
mechanical  obedience,  to  stand  up  in  their  capacity  of  citizens 
against  their  industrial  rulers  when,  as  often  happens  upon 
critical  occasions,  political  interests  correspond  with  economic 
cleavages. 

I  would  not  dogmatise  upon  the  necessity  of  these  human 
disadvantages  of  Scientific  Management.  The  more  rigorous 
routine  of  the  work-day  might  be  adequately  compensated  by 
shorter  hours,  higher  wages,  increased  opportunities  for  educa- 
tion, recreation,  and  home  life.  But  there  can  be  no  security 
for  adequate  compensations  of  these  orders  under  a  scientific 
management  directed  primarily  by  private  profit-making  motives. 
For  there  is  no  guarantee  that  the  larger  profits  to  a  business 
firm  do  not  entail  a  damage  to  its  employees,  not  offset  by  the 
bonus  which  they  may  obtain.  Nor  have  we  the  required  se- 
curity that  any  social  gain  in  the  way  of  increased  product  and 
lower  prices  may  not  be  cancelled  by  the  human  injury  inflicted 
upon  large  bodies  of  workers  and  citizens  by  the  more  mechan- 
ical and  servile  conditions  of  their  labour. 


SCIENTIFIC  MANAGEMENT  221 

§  10.  A  little  reflection  will  make  it  clear  that  the  complete 
success  of  such  a  business  economy  would  involve  a  correspond- 
ing '  science '  on  the  side  of  consumption.  The  standardised 
worker  ought  also  to  be  a  standardised  consumer.  For  the  reg- 
ular reliable  conformity  of  work  must  involve  a  similar  con- 
formity in  diet  and  in  other  habits  of  life.  If  the  'scientific 
manager'  were  the  full  owner  of  his  workmen,  it  would  evidently 
be  a  function  of  his  science  to  work  out  experimentally,  with  the 
assistance  of  the  bio-psychologist,  the  cheapest  and  best  way  of 
living  for  each  particular  trade  and  type  of  worker.  He  would 
discover  and  prescribe  the  precise  combination  of  foods,  the  most 
hygienic  clothing  and  housing,  the  most  appropriate  recreations 
and  the  'best  books'  for  each  class,  with  a  view  to  the  produc- 
tive efficiency  of  its  members.  He  would  encourage  by  bonuses 
eugenic,  and  discourage  by  fines  dysgenesic  marriages  among  his 
employees.  So  far  as  intelligent  employers  are  in  a  position  to 
determine  or  to  influence  the  expenditure  of  the  wages  they  pay 
and  the  general  conduct  of  the  lives  of  their  employees  outside 
the  working  hours,  they  are  disposed  to  practice  this  policy. 
Where  they  are  the  owners  of  the  town  or  village  in  which  the 
workers  find  it  most  convenient  to  live,  they  can  often  do  so  with 
considerable  effect.  Philanthropic  motives  are  often  combined 
with  business  motives,  and  the  combination  may  often  be 
genuinely  conducive  to  the  human  welfare  of  the  community. 
Temperance,  sanitation,  and  hygiene,  educational  and  recreative 
opportunities  may  be  made  available.  Certain  regulations, 
chiefly  of  a  prohibitory  nature,  regarding  the  use  of  alcohol, 
betting,  or  marriage,  are  imposed  by  some  employers  as  con- 
ditions of  employment.  Such  interferences  outside  the  hours 
of  labour  are,  however,  exceptional  and  are  generally  justified 
on  special  grounds  of  economic  safety  and  efficiency. 

§  ii.  But  an  altogether  wider  issue  is  opened  up  in  the  claims, 
not  of  the  particular  employer  but  of  industrial  society  to  im- 
pose or  evoke  standards  of  consumption  scientifically  adjusted 
to  the  various  grades  of  industrial  efficiency.  If  we  regard  a 
nation  as  an  economic  society,  putting  out  productive  energy  in 
wealth-creation,  it  becomes  evident  that  science  has  much  to 
say,  and  can  have  more,  regarding  the  expenditure  of  incomes 


222  WORK  AND  WEALTH 

and  the  consequent  consumption  of  wealth.  The  science  of 
scientific  management,  with  all  its  psycho-physical  apparatus 
for  measuring  results,  can  be  applied  to  standards  of  living  foi 
individuals  and  families.  The  beginnings  of  this  idea  are  found 
in  the  distinction  which  figured  so  largely  in  the  classical  Political 
Economy  between  productive  and  unproductive  consumption. 
The  discussions  of  Arthur  Young,  Eden  and  others,  regarding 
the  respective  merits  of  wheat  and  oatmeal,  beer  and  tea,  as 
ingredients  of  working-class  diet,  were  directed  avowedly  by 
this  conception  of  economy.  A  good  food  was  one  that  yielded 
more  muscular  energy  or  endurance  per  penny  of  expenditure. 
The  more  enlightened  doctrine  known  as  'the  economy  of  high 
wages'  was  early  recomended  by  philanthropists  like  Robert 
Owen,  or  business  men  like  Mr.  Brassey,  on  the  score  of  experi- 
ments relating  to  the  larger  output  of  labour-power  which  higher 
wages  with  better  feeding  rendered  possible.  But  there  was 
no  'science'  worth  mention  in  these  crude  experiments.  Only 
within  recent  years,  with  the  advance  of  organic  chemistry  and 
physiology,  has  the  'science'  of  dietetics  begun  to  emerge, 
analysing  the  various  foods  and  assigning  them  their  values  as 
producers  of  tissue  and  of  energy.  We  are  now  told  the  quanti- 
ties of  proteids,  carbohydrates  and  fats  contained  in  various 
foods,  and  dietaries  based  upon  these  analyses  are  prescribed 
for  different  sorts  of  workers,  and  for  different  ages  of  members 
of  a  family.  At  present  the  science  does  not  pretend  to  any 
large  amount  of  accuracy,  indeed  wide  divergences  still  exist  in 
its  very  foundations.  But  there  is  no  reason  to  doubt  that  further 
analysis  and  experimentation  may  be  able  to  reach  food  stand- 
ards which  on  the  consumption  side  will  correspond  to  the  econo- 
omy  of  standard  methods  of  work  under  scientific  management. 
It  may  be  quite  possible  to  lay  down  with  considerable  exacti- 
tude the  amounts  and  combinations  and  intervals  of  food  for 
coal-miners,  weavers,  clerks,  motor-men,  etc.,  together  with 
estimates  of  the  amount  of  expenditure  required  to  maintain  the 
different  forms  of  industrial  efficiency.  The  productive  value 
of  other  elements  of  the  wage-earner 's  expenditure  will  not  indeed 
admit  of  so  much  exactitude,  partly  because  his  own  'utility' 
obtained  from  such  expenditure  will  not  easily  be  separable 


SCIENTIFIC  MANAGEMENT  223 

from  that  of  his  faniily.  But  though  family  expenditure  cannot ' 
thus  be  regarded  as  exclusively  directed  by  productive  con- 
siderations, the  physical  efficiency  which  is  its  chief  test  may  be 
regarded  primarily  as  an  industrial  asset.  Indeed,  this  view 
is  implicit  in  most  talk  of  standards  of  comfort  and  in  most 
discussions  of  a  'minimum'  or  'living'  or  'subsistence'  wage. 
It  means  such  wage  as,  economically  expended,  will  enable  a 
wage-earner  to  rear  an  average  family  in  that  measure  and  kind 
of  efficiency  required  to  do  work  of  a  sort  similar  to  that  by  which 
he  earns  the  wage.  No  doubt  this  notion  is  tempered  by  some 
slight  considerations  of  education  and  of  betterment.  But 
productive  efficiency  is  always  the  basic  factor.  Food  and  hous- 
ing, by  far  the  most  important  elements  in  working-class  ex- 
penditure, are  clearly  in  process  of  being  standardised  by  hy- 
gienics in  the  service  of  a  science  of  productive  consump- 
tion. 

§  12.  Two  other  sciences,  by  which  society  may  seek  to  stand- 
ardise the  lives  of  workers,  are  eugenics  and  education.  In  both 
of  these  the  humanists  may  have  a  fierce  battle  to  fight  against 
the  dominion  of  the  industrialists.  Eugenics,  if  it  can  get  recog- 
nition as  a  social  art,  will  regulate  marriage  for  the  purposes  of 
good  stock.  But  good  for  what?  Perhaps  for  industry  and  war,  if 
some  specialists  should  have  their  way.  So  too  with  education. 
Primary  education  has  already  been  ear-marked  in  our  towns 
for  the  production  of  cheap  clerks,  and  technical  and  professional 
training  under  various  guises  invade  our  citadels  of  higher  learn- 
ing. All  is  part  of  the  same  great  claim  of  society  to  economise 
and  standardise  the  body  and  the  mind  of  its  citizen,  primarily 
in  order  that  he  may  do  more  efficiently  the  social  or  routine 
services  it  requires  of  him. 

This  economic  standardisation,  as  we  recognise,  is  not  identical 
in  motives  or  in  operation  as  it  bears  respectively  upon  the  pro- 
ductive and  consumptive  functions.  On  its  productive  side  it 
is  regulated  by  considerations  of  private  business  profits.  Its 
primary  aim  is  to  get  men  to  work  in  such  a  way  as  to  produce 
the  largest  margin  between  the  wage  necessary  to  evoke  full 
efficiency  under  'scientific  management'  and  the  market  value 
of  the  output.  Indirectly,  it  is  claimed,  this  policy  redounds  to 


224  WORK  AND  WEALTH 

the  advantage  of  industrial  society  in  an  increase  of  the  body 
of  consumable  wealth,  some  considerable  share  of  which  will 
pass  into  the  general  store.  On  its  consumptive  side  the  scien- 
tific standardisation  works  differently.  It  is  plied  more  directly 
as  a  social-economic  art,  working  out  for  the  family,  as  well  as 
for  the  individual  workman,  a  standard  of  living,  physical,  in- 
tellectual, and  moral,  conducive  to  the  interests  of  society  re- 
garded as  an  economic  or  wealth-producing  entity.1  But  though 
society,  in  thus  seeking  to  secure  standards  of  economic  effi- 
ciency for  its  family  units,  is  not  directly  concerned  in  further- 
ing the  profit-seeking  ends  of  private  business  firms,  indirectly 
it  is  doing  so.  For,  so  long  as  expenditure  of  income,  or  family 
budgets,  are  estimated  strictly  in  accordance  with  the  economic 
efficiency  they  yield  to  the  present  and  prospective  working 
members,  the  process  is  in  reality  supplementary  to  the  science 
of  business  management.  For  the  better  birth,  better  rearing, 
better  health  and  education  which  it  furnishes,  will  all  even- 
tually be  translated  into  larger  quantity  and  better  quality  of 
labour-power  for  scientific  management  to  handle  in  its  various 
profit-making  processes. 

Now  the  thoughtful  members  of  the  working-classes  have 
always  half-instinctively  regarded  with  some  suspicion  the  en- 
deavours of  social  reformers  to  make  them  use  cheaper  foods 
yielding  more  nutriment  for  the  money,  temperance  movements 
to  keep  down  their  conventional  necessaries,  and  technical 
education  to  make  their  labour-power  more  productive.  For 
they  have  doubted  whether  the  cheaper  living  or  the  increased 
productivity  would  necessarily  come  home  to  them  in  improved 
conditions  of  life.  Nor  has  their  suspicion  been  wholly  ground- 
less. Though  in  the  long  run,  it  might  seem  to  follow  that  as 
consumers  and  even  perhaps,  though  less  surely,  as  wage-earners, 
they  would  get  some  gain  from  the  more  economical  use  of  their 
labour-powers,  the  bulk  of  the  visible  gains  might  very  well 

1  This  rationalisation  of  life  for  distinctively  economic  purposes,  alike  on  its  pro- 
ductive and  expenditure  side,  has  been  carried  further  by  the  Jews  than  by  any  other 
people,  i.  e.,  their  religion,  politics,  eugenics  and  education  have  been  directed  more 
exclusively  and  more  rationalistically  towards  the  business  arts  in  which  they  excel, 
those  of  the  financier,  undertaker,  trader,  than  in  the  case  of  other  peoples. 

See  Sombart,  The  Jews  and  Modern  Capitalism,  Chs.  IX  and  X. 


SCIENTIFIC  MANAGEMENT  225 

pass  into  the  hands  of  the  employing  classes  in  higher  profits  or 
salaries  of  management. 

This  consideration  opens  the  deeper  criticism  which  human- 
ism and  Sociology  are  entitled  and  required  to  press  upon  the 
policy  of  the  industrial  economists.  Every  improvement  in  the 
technique  of  the  arts  of  industry  or  of  consumption  may  be  con- 
sidered as  conducive  to  economic  progress,  yielding  an  increase 
of  marketable  wealth.  But,  if  such  improvements  increase  the 
human  costs  of  production,  or  dimmish  the  human  utilities  of 
consumption,  as  may  happen  if  they  consist  largely  in  the 
standardising  of  productive  and  consumptive  processes,  they  may 
bring  no  increase,  possibly  may  bring  a  decrease,  of  human 
welfare.  Proposals  for  scientific  management  or  for  standardised 
dietaries  are  not  indeed  to  be  condemned,  upon  the  general 
application  of  such  criticism.  For  it  is  agreed  that  such  standard- 
isation within  certain  limits  is  socially  advantageous.  The 
question,  therefore,  is  partly  one  of  degree,  partly  as  to  the 
security  there  exists  that  the  economic  gains  of  the  improved 
economy  shall  be  properly  apportioned. 

§  13.  But  the  final  test  would  not  consist  in  determining 
whether  increased  costs  and  diminished  utilities  did  or  did  not 
offset  the  prima  facie  advantages  of  the  economic  improvements. 
The  art  of  social  welfare,  humanism,  will  insist  upon  considering 
the  reactions  of  the  standardisation  of  work  and  consumption 
upon  other  faculties  and  functions  than  the  economic,  and  in 
considering  prospective  as  well  as  present  gains.  A  scientific 
rigour  in  economy  of  work  and  of  expenditure,  which  should 
remove,  both  from  the  industry  and  the  lives  of  the  great  masses 
of  a  population,  all  opportunities  for  initiative,  experiment, 
risk-taking  and  the  display  of  personality,  might  reduce  the 
human  value  of  life  for  the  average  man,  and  so  impair 
the  worth  of  the  society.  Humanism,  therefore,  while  ap- 
proving the  application  of  science  to  the  arts  of  production 
and  consumption,  insists  that  it  shall  be  shown  to  be  the 
servant  not  the  master  of  humanity.  Such  proof  is  sought, 
because  the  assumption,  so  often  made,  that  all  such  eco- 
nomic progress  must  be  humanly  profitable,  is  seen  to  be  un- 
warranted. 


226  WORK  AND  WEALTH 

A  'scientific'  view  of  human  industry  would  establish  the 
following  lines  of  investigation. 

(1)  The  productive  ability  of  each  producer  would  be  con- 

sidered in  relation  to  its  technical  efficiency,  i.  e.,  the 
best  -way  for  him  to  do  his  job. 

(2)  His  special  productive  function  would  be  considered  in 

its  reactions  (a)  upon  his  general  standard  of  life  on 
its  economic  side,  i.  e.,  in  relation  to  his  productive 
and  consumptive  functions;  (b)  upon  his  individual 
human  life. 

(3)  The  standard  of  consumption  of  each  consumer  would 

be  considered  in  relation  to  its  technical  efficiency  (a) 
for  purposes  of  production;  (b)  for  purposes  of  indi- 
vidual welfare. 

(4)  Industry  as  a  social  function  would  be  subjected  to  criti- 

cism from  the  wider  standpoint  of  social  welfare,  i.  e., 
as  one  element  contributing  to  the  life  of  a  nation. 

Finally,  an  analysis  of  the  human  worth  of  existing  industry 
on  its  productive  and  consumptive  sides  would  not  suffice.  For 
such  an  analysis  merely  accepts  the  existing  system  of  industry 
and  enquires  into  the  best  human  methods  of  working  it. 

But  humanist  criticism  must,  of  course,  go  behind  this  accept- 
ance. The  problem  of  industry  which  it  will  envisage  will  be 
one  that  takes  as  its  data  the  existing  resources  of  the  nation, 
natural  and  human,  and  considers  how  these  resources  may,  in 
accordance  with  present  knowledge,  be  best  applied  for  the  pro- 
vision of  organic  welfare  according  to  the  best  accepted  inter- 
pretation of  that  term.  However  difficult  it  may  be  to  secure, 
to  justify  and  to  apply  that  standpoint,  this  is  the  form  in  which 
the  economic  problem  must  present  itself  to  the  statesman,  the 
publicist,  and  the  social  reformer,  so  far  as  they  are  clear-sighted, 
rational  and  disinterested  in  their  work. 

So  regarded,  each  individual  would  be  considered  as  a  complex 
of  activities  and  wants,  whose  specialised  work  for  society  must 
be  harmonised  with  that  freedom  and  exercise  of  his  non- 
specialised  functions  needed  to  enable  him  to  realise  himself  as 
a  human  personality.  Due  consideration  would  be  given  to  the 
interplay  of  his  productive  and  consumptive  functions  within 


SCIENTIFIC  MANAGEMENT  227 

his  economic  life.  His  economic  life  must,  however,  be  kept  in 
due  subordination  to  his  wider  human  life,  consisting,  as  the 
latter  does,  mainly  of  non-economic  functions. 

Finally,  his  economic  and  human  life  as  a  personality  must 
be  harmonised  with  the  economic  and  human  life  of  the  society 
of  which  he  is  a  member. 

Such  are  the  main  implications  of  what  might  be  termed  the 
human  scientific  calculus  of  industrial  values. 


CHAPTER  XV 

THE   DISTRIBUTION   OF  LEISURE 

§  i.  Leisure,  regarded  as  an  economic  good,  comes  under  the 
general  law  of  distribution  of  wealth.  But  the  notorious  defects 
of  its  distribution,  and  their  human  consequences,  are  such  as  to 
claim  for  it  a  separate  place  in  our  enquiry.  Modern  indus- 
trialism by  its  large  unearned  surplus  has  greatly  increased  the 
size  of  the  leisure  classes.  For  wherever  such  surplus  goes, 
there  is  the  possibility  and  probability  of  a  life  of  leisure.  In 
our  study  of  Consumption  we  traced  the  part  played  by  con- 
spicuous leisure  as  an  element  of  pride  and  power  in  the  economy 
of  the  rich.  In  Great  Britain  the  size  of  this  leisure  class  is  by 
no  means  measured  by  the  number  of  those  who  stand  in  the 
census  as  'unoccupied.'  In  the  top  stratum  of  the  business 
world  we  find  considerable  numbers  of  the  directing  and  man- 
agerial class  who  are  seldom  or  ever  'busy.'  Their  office  hours 
are  short  and  irregular,  their  week-ends  extend  from  Friday  to 
Tuesday,  their  holidays  are  long  and  frequent. 

Most  of  their  leisure  is  accompanied  by  profuse  consumption, 
involving  thus  from  the  standpoint  of  society  a  double  waste, 
a  waste  of  time  and  of  substance.  Where  does  all  this  leisure 
come  from?  The  answer  to  this  question  seems  tolerably  simple. 
It  has  often  been  observed  that  labour-saving  machinery  and 
other  devices  for  abridging  human  toil  have  done  very  little  to 
lighten  or  shorten  the  work-day  for  the  workers.  What  then 
has  become  of  the  labour  that  is  saved?  Most  of  it  has  gone  to 
enlarge  the  leisure  of  the  leisured  class,  or  perhaps  we  should 
say,  of  the  leisured  classes.  For  we  saw  that  there  existed  a 
lower  as  well  as  an  upper  leisure  class,  a  necessary  product  of 
the  same  mal-distribution  of  resources  as  sustains  the  latter. 
For  an  industrial  system  that  grinds  out  unproductive  surplus 
breaks  down  the  physical  and  moral  efficiency  of  large  numbers 
of  actual  or  potential  workers  as  a  by-product  of  the  overdriving 

228 


THE  DISTRIBUTION  OF  LEISURE  229 

and  underfeeding  process.  The  reckless  breeding  of  the  class 
thus  broken  down  furnishes  a  horde  of  weaklings,  shirkers  and 
nomads,  unassimilated,  unassimilable  by  the  industrial  system. 
These  beings,  kept  alive  by  charity  and  poor-laws,  have  grown 
with  modern  industrialism  and  constitute  the  class  known  as 
'unemployables.'  They  are  often  described  as  a  'standing  men- 
ace to  civilisation, '  and  are  in  fact  the  most  pitiable  product  of 
the  mal-distribution  of  wealth. 

§  2.  But  the  irregularities  of  modern  production  and  con- 
sumption are  also  responsible  for  a  vast  amount  of  involuntary 
and  injurious  leisure  among  the  genuine  working-classes.  That 
leisure  is  commonly  termed  'unemployment.'  It  is  not  true 
leisure,  in  the  sense  of  time  for  recreation  or  enjoyment,  though 
it  might  become  so.  For  the  most  part  it  is  at  present  wasteful 
and  demoralising  idleness. 

A  certain  amount  of  unemployment  is  of  course  unavoidable 
in  any  organisation  of  industry.  There  will  be  some  leakage  of 
time  between  jobs  and  unpredictable  irregularities  of  weather 
and  climate  will  involve  some  idleness.  Expansions  and  con- 
tractions of  special  trades,  changes  in  methods  of  production 
and  of  consumption,  the  necessary  elasticity  of  economic  life, 
will  continue  to  account  for  the  temporary  displacement  of 
groups  of  workers.  There  is,  of  course,  no  social  wastage  in 
this  process,  if  it  is  properly  safeguarded.  But  hitherto  it  has 
been  a  great  source  of  individual  and  social  waste.  Society  is 
only  beginning  to  realise  the  duty,  or  indeed  the  possibility,  of 
taking  active  steps  to  reduce  the  quantity  of  this  unemployment 
and  to  utilise  what  is  unavoidable  for  the  benefit  of  the  unem- 
ployed and  of  society.  The  cultivation  of  these  spare  plots  of 
time  in  the  normal  life  of  the  workers  may  become  a  highly 
serviceable  art. 

If  all  unemployment  could  be  spread  evenly  over  the  working 
year,  taken  out  in  a  shortening  of  the  ordinary  working-day  and 
in  the  provision  of  periodic  and  sufficient  holidays,  an  immense 
addition  would  be  made  to  the  sum  of  industrial  welfare.  Thus, 
without  any  reduction  in  the  aggregate  of  labour-time,  a  sensible 
reduction  in  the  human  cost  of  labour  might  be  achieved,  if  law, 
custom,  or  organised  labour  policy  made  it  impossible  for  em- 


23o  WORK  AND  WEALTH 

ployers  to  vary  violently  or  suddenly  the  volume  of  employment 
and  to  sandwich  periods  of  over-time  with  periods  of  short-time. 
These  baneful  irregularities  of  employment  appear  inevitable  so 
long  as  they  remain  permissible,  as  do  sweating  wages  and  other 
bad  conditions  of  labour.  When  they  are  no  longer  permissible, 
the  organised  intelligence  of  the  trade  will  adjust  itself  to  the 
new  conditions,  generally  with  little  or  no  loss,  often  with  positive 
gain. 

If  there  are  trades  upon  which  season,  fashion,  or  other  un- 
controllable factors  impose  great  irregularity  of  employment, 
a  sound  social  policy  will  have  close  regard  to  the  nature  of  this 
irregularity.  Where  an  essentially  irregular  trade  is  engaged 
in  supplying  some  necessary  or  convenience  of  life,  as,  for  in- 
stance, in  gas-works  and  certain  branches  of  transport,  alter- 
native trades  may  be  found  whose  fluctuations  tend  to  vary 
inversely  with  those  of  the  former  trades,  and  which  can  furnish 
work  suitable  in  kind  and  place  to  those  who  are  out. 

Statistics  of  employment  show  that  the  aggregate  of  employ- 
ment during  any  given  year  does  not  vary  much.  It  would  vary 
less,  if  every  man  engaged  in  an  essentially  irregular  trade  had 
an  alternative,  in  which  he  was  qualified  to  earn  a  living  when 
employment  in  the  other  trade  was  short.  For  there  is  little 
truth  in  the  contention  that  specialisation  for  most  manual 
trades  is  carried  so  far  that  an  alternative  or  subsidiary  employ- 
ment spoils  a  worker  for  efficiency  in  his  prime  trade.  If  there 
are  any  necessary  trades  for  whose  unavoidable  unemployment 
no  such  effective  provision  can  be  made,  society  must  either 
saddle  the  trade  with  the  obligation  of  keeping  the  'reserve' 
of  labour  while  it  stands  in  waiting,  or  it  must  itself  undertake 
the  administration  of  the  trade  as  one  which  cannot  safely  be  left 
in  private  hands.  In  the  case  of  fashion  or  luxury  trades,  which 
furnish  many  instances  of  greatest  irregularity,  legal  prohibition 
of  over-time  will  often  operate  most  beneficially.  Where  much 
unemployment  still  remains,  a  high  contribution  to  an  un- 
employed insurance  fund  would  stimulate  advantageous  re- 
adjustments. Finally,  if  there  are  trades  incapable  of  bearing 
the  true  costs  of  maintenance  of  the  labour  they  employ,  it 
would  still  be  right  to  place  on  them  the  obligation  to  do  so, 


THE  DISTRIBUTION  OF  LEISURE  231 

for  their  destruction  will  be  a  gain  not  a  loss  to  a  society  that 
understands  its  human  interests. 

But  the  main  problem  of  leisure  would  still  remain  unsolved. 
For  the  normal  burden  of  industrial  toil,  imposed  by  our  present 
economic  system  upon  most  workers,  is  excessive.  That  excess 
consists  primarily  in  duration  of  the  work-day,  though  aggra- 
vated in  many  cases  by  intensity  or  pace  of  working.  Great 
numbers  of  workers,  especially  among  women,  are  employed 
in  occupations  where  neither  law,  custom,  nor  trade  organisation, 
imposes  any  limits.  No  factory  day  affects  the  employees  in 
shops  or  offices  or  most  warehouses,  or  in  most  transport  trades, 
or  in  domestic  service — departments  of  employment  which 
absorb  a  rapidly  increasing  number  and  proportion  of  the  em- 
ployed population.  There  are  vast  numbers  of  domestic  work- 
shops and  home  trades  in  which  men  and  women  are  employed, 
where  all  hours  are  worked.  No  legal  restrictions  of  hours  are 
set  upon  adult  male  labour  in  manufacturing  and  other  in- 
dustrial work  in  most  of  the  metal  and  other  trades  which  are 
exclusively  or  predominantly  men's  employments,  though  in 
trades  where  women  also  are  employed  restrictions  are  often 
imposed  which  in  fact  extend  to  men  the  factory  day. 

But  there  is  a  generally  recognised  feeling  that  the  length  of 
the  factory  day  is  gravely  excessive,  that  10^2,  or  even  9  hours 
per  diem,  under  modern  conditions  of  speeded-up  machinery 
and  nervous  tension,  involve  too  heavy  a  human  cost. 

§  3.  It  is  this  growing  volume  of  feeling  that  has  crystallised 
in  the  demand  for  an  eight-hours  day.  This  is  no  immoderate 
demand.  A  regular  contribution  of  eight  hours'  working  energy 
of  hand,  or  brain,  or  nerves,  to  some  narrow  routine  process,  is 
as  much  as,  or  more  than,  the  ordinary  man  or  woman  can 
afford,  in  the  wholesome  interest  of  his  personality,  to  give  up  to 
society.  For  we  have  recognised  quite  clearly  that  a  specialisa- 
tion of  function,  a  division  of  labour,  growing  ever  finer,  is 
required  of  the  individual  in  the  interests  of  society.  He  must 
make  this  apparent  sacrifice  of  his  private  tastes,  feelings  and 
interests,  for  the  good  of  the  society  of  which  he  is  a  member. 
It  is  not,  as  we  perceive,  a  real  sacrifice,  unless  the  demand 
made  upon  him  is  excessive,  for  the  good  of  the  society  he  serves 


232  WORK  AND  WEALTH 

is  his  good,  and  what  he  gives  out  comes  back  to  him  in  par- 
ticipation of  the  common  life.  But,  when  the  task  imposed  is  too 
long  or  too  hard,  the  sacrifice  becomes  an  injury,  the  encroach- 
ment upon  the  human  life  of  the  worker  inflicts  grave  damage, 
which  damage  again  reacts  upon  society. 

The  stress  of  the  Labour  Movement  upon  the  urgency  of 
shortening  the  work-day  to-day  is  extremely  significant.  It 
testifies  to  two  advances  in  the  actual  condition  of  the  labouring 
classes.  In  the  first  place,  it  indicates  that  some  substantial 
progress  has  been  made  towards  a  higher  level  of  material 
standard  of  consumption.  For  workers  on  the  lower  levels  of 
poverty  dare  not  ask  for  reduced  hours  of  labour,  involving, 
as  may  well  occur,  a  reduction  of  pay.  Workers  struggling 
for  a  bare  physical  subsistence  cannot  afford  to  purchase 
leisure. 

Of  course  I  know  that  even  the  better-to-do  workers  who 
voice  a  demand  for  an  eight-hours  day  are  not  ready  to  proclaim 
their  willingness  to  pay  for  it  in  diminished  wages.  Nor  need 
they  in  all  cases.  Where  the  shorter  day  is  attended  by  improved 
efficiency  or  increased  intensity  of  labour,  or  merely  by  better 
organisation  of  the  business,  there  may  be  nothing  to  pay. 
More  leisure  has  been  squeezed  out  of  the  working-day.  There 
are  many  cases  where  this  can  be  done,  for  the  working-day  in 
many  instances  is  wastefully  prolonged.  But,  though  in  cer- 
tain trades  a  ten-hours  day  may  be  reduced  to  nine,  or  even 
eight,  without  any  reduction  of  output,  this  is  not  the  case  in 
other  trades,  nor  even  in  the  former  trades  could  the  process  be 
carried  far  without  a  loss  of  output.  In  a  great  many  employ- 
ments a  short  working-day  will  involve  a  larger  economic  cost 
of  labour,  and  where,  as  is  usual  in  competitive  trade,  this 
larger  cost  cannot  be  made  good  out  of  profits,  labour  will  have 
to  buy  this  leisure,  in  part  at  any  rate,  by  reduced  wages.  For 
even  if  he  can  get  it  shifted  on  to  the  consumer  in  the  shape  of 
higher  prices,  as  consumer  he  will  in  his  turn  have  to  bear  a 
part  of  it. 

Where  the  demand  for  shorter  hours  is  genuine,  and  is  not 
a  mere  cover  for  extended  over-time,  to  be  paid  for  at  a  higher 
rate,  it  must  be  taken  as  indicative  of  the  workers'  willingness 


THE  DISTRIBUTION  OF  LEISURE  233 

to  take  part  of  his  share  of  industrial  progress  in  leisure  instead 
of  wages. 

§  4.  But  leisure,  as  an  economic  asset,  is  not  a  mere  question 
of  hours.  A  shorter  work-day  might  be  dearly  bought  at  the 
cost  of  an  intensification  of  labour  which  left  body  and  mind 
exhausted  at  the  end  of  each  day.  The  opposition  of  workers 
to  a  policy  of  speeding-up,  or  the  use  of  pace-setters,  is  usually 
a  sane  act  of  self-defence,  and  not  the  fractious  obstruction 
to  industrial  progress  it  is  sometimes  represented.  No  con- 
siderations of  human  endurance  limit  the  pace  at  which  ma- 
chinery driven  by  mechanical  power  may  be  worked.  Unless, 
therefore,  restraints  are  put  by  law,  custom  or  bargaining,  upon 
the  speed  of  machines,  or  the  number  which  a  worker  is  called 
upon  to  serve,  competition  may  impose  a  work-day  which,  though 
not  unduly  long  in  hours,  habitually  exhausts  the  ordinary 
worker.  It  is  not  always  realised  how  great  a  change  took  place 
when  the  weaver,  the  shoemaker,  the  smith,  passed  from  the 
workshops,  where  the  pace  and  other  conditions  of  work  were 
mostly  regulated  by  their  voluntary  action,  to  the  steam-driven 
factory.  The  shoemaker  and  the  tailor  under  the  old  conditions 
had  time,  energy  and  liberty  for  thought  while  carrying  on  their 
work:  they  could  slacken,  break  off  or  speed  up,  their  work, 
according  to  their  inclination.  The  clicker  or  heeler  in  a  shoe 
factory,  the  cutter-out  in  a  clothing  factory,  have  no  such  meas- 
ure of  freedom.  This  is,  of  course,  a  normal  effect  of  modern 
industrialism.  Closer  and  more  continuous  attention  is  demanded 
during  the  working  hours. 

Thus  the  real  question  of  leisure  is  a  question  of  spare  human 
energy  rather  than  of  spare  hours.  The  shorter  working-day  is 
chiefly  needed  as  a  condition  favourable  to  spare  energy.  Though 
therefore,  an  eight-hours  day  may  not  unreasonably  be  taken  as 
a  proximate  reform,  for  labour  in  general,  there  is  no  reason  why 
the  work-day  in  all  occupations  should  be  cut  to  this  or  any  other 
exact  measure.  Such  arithmetical  equality  would  evidently 
work  out  most  inequitably,  as  between  trade  and  trade,  or  pro- 
cess and  process  in  the  same  trade.  In  many  large  departments 
of  industry,  the  transport  and  distributive  trades  in  particular, 
numerous  interstices  of  leisure  are  inserted  in  a  day's  work,  easing 


234  WORK  AND  WEALTH 

the  burden  of  the  day,  and  sometimes  affording  opportunity  for 
recreation  and  intercourse.  In  the  more  arduous  processes  of 
manufacture,  mining,  or  in  clerical  and  other  routine  brain  work, 
there  is  little  or  no  scope  for  such  relaxation. 

But  while  such  considerations  evidently  affect  the  detailed 
policy  of  the  shorter  day  in  its  pressure  on  the  several  occupa- 
tions, they  do  not  affect  the  general  policy. 

There  can  be  no  doubt  that  an  excessive  and  injurious  amount 
of  specialised  labour  is  exacted  from  the  workers  by  the  ordinary 
industrial  conditions  of  to-day  in  nearly  all  industrial  processes. 

§  5.  The  first  plea  for  a  shorter  day  is  one  which  our  analysis 
has  made  self-evident. 

It  will  greatly  reduce  the  human  cost  of  production  in  most 
processes.  For,  as  we  recognise,  the  strain  of  muscular  and  nerv- 
ous fatigue,  both  conscious  and  unconscious,  gathers  force  and 
grows  with  great  rapidity  during  the  later  hours  of  the  work- 
day. Though  the  curve  representing  the  variations  of  the  human 
cost  will  of  course  differ  in  every  sort  of  work  and  for  different 
workers,  their  age,  sex,  strength,  health  and  other  personal  con- 
ditions affecting  it,  the  last  hours  of  each  shift  will  contain  a 
disproportionate  amount  of  fatigue,  pain  and  other  'costs,' 
while  the  quality  and  quantity  of  the  work  done  in  these  last 
hours  will  be  inferior. 

If  out  of  any  stock  of  material  goods,  we  were  able  to  separate 
the  product  of  the  last  hour's  work  from  that  of  the  earlier  hours 
in  the  work-day,  and  could  subject  it  to  the  analysis  of  human 
cost  and  utility,  which  we  have  endeavoured  to  apply  to  the 
general  income,  what  should  we  find?  This  last  increment  of 
the  product  would  contain  a  heavier  burden  of  human  cost  of 
production  than  any  of  the  earlier  increments.  Again,  turning 
to  the  consumption  side,  what  should  we  find?  This  last  in- 
crement must  be  considered  as  furnishing  the  smallest  amount 
of  human  utility  in  its  consumption.  Indeed,  if  we  are  right  in 
holding  that  a  considerable  fraction  of  each  supply,  even  of 
what  are  commonly  classed  as  material  necessaries  of  life,  such 
as  foods,  clothings,  etc.,  is  wastefully  or  even  detrimentally  con- 
sumed by  the  well-to-do,  there  is  reason  to  hold  that  this  last  in- 
crement of  product,  involving  the  largest  human  cost  in  its 


THE  DISTRIBUTION  OF  LEISURE  235 

production,  contains  no  utility  but  some  amount  of  human  dis- 
utility in  its  consumption. 

If  this  analysis  be  true,  the  last  hour's  work  may  be  doubly 
wasteful  from  the  standpoint  of  human  welfare. 

Of  the  £2,000,000,000  which  constitutes  our  income  it  may 
very  likely  be  the  case  that  £200,000,000  of  it  represents  wealth, 
which,  from  the  human  standpoint,  is  'illth,'  alike  in  the  mode 
of  its  production  and  of  its  consumption.  If  it  had  not  been 
produced  at  all,  the  nation  might  have  been  far  better  off,  for  by 
abstaining  from  the  production  of  this  sham  wealth,  it  would 
have  produced  a  substantial  amount  of  leisure. 

It  is  of  course  true  that  the  particular  groups  of  producers, 
who  by  their  last  hour's  labour  made  these  goods,  may  not  have 
been  losers  by  doing  so;  their  heavy  toil  may  have  been  compen- 
sated by  the  enhanced  wage  which  they  could  not  otherwise  have 
got,  and  the  loss  of  which  would  have  injured  their  standard  of 
life.  It  is,  indeed,  the  operation  of  competition  upon  wages  that 
actually  forces  into  existence  this  sham-wealth.  Drawn  out  of 
over-wrought  workers  by  the  unequal  conditions  of  the  wage- 
bargain,  it  passes  into  wasteful  consumption  by  the  back-stroke 
of  the  same  law  of  distribution,  which  pays  it  away  as  'surplus' 
or  'unearned'  wealth. 

It  is  only  the  clear  consideration  of  its  production  and  con- 
sumption from  the  social  standpoint  that  exhibits  the  waste  of 
the  last  hour's  product. 

But  from  the  standpoint  of  the  individual  worker  the  economy 
of  a  shorter  work-day  has  a  double  significance.  We  have  seen 
that  it  more  than  proportionately  diminishes  his  personal  cost, 
by  cancelling  the  last  and  most  costly  portion  of  his  work-day. 
But  it  also  increases  the  human  utility  which  he  can  get  out  of 
his  wages.  A  day  of  exhausting  toil  entails  the  expenditure  of  a 
large  portion  of  his  wage  in  mere  replacement  of  physical  wear 
and  tear,  or  incites  to  expenditure  on  physical  excesses,  while 
the  leisure  hours  are  hours  of  idleness  and  torpor.  A  reduction 
of  the  work-day  will,  by  the  larger  leisure  and  spare  energy  it 
secures,  reduce  the  expenditure  upon  mere  wear  and  tear,  and 
increase  the  expenditure  upon  the  higher  and  more  varied  strata 
of  the  standard  of  comfort.  More  leisure  will  in  general  so  alter 


236  WORK  AND  WEALTH 

the  mode  of  living  as  to  enable  the  worker  to  get  more  and  better 
utility  out  of  the  expenditure  of  his  wages.  Take  an  extreme 
case.  A  man  who  toils  all  day  long  at  some  exhausting  work,  and 
goes  home  at  night  too  tired  for  anything  but  food  and  sleep,  so 
as  to  enable  him  to  continue  the  same  round  to-morrow,  though 
he  may  earn  good  wages  from  this  toil,  can  get  little  out  of  them. 
If  he  were  induced  to  work  less  and  leave  himself  some  time 
and  energy  for  relaxation  and  enjoyment,  he  would  get  a  larger 
utility  out  of  less  money  income. 

The  matter,  however,  does  not  need  labouring.  It  is  evident 
that  many  modes  of  consumption  depend  in  part,  for  the  pleasure 
and  gain  they  yield,  upon  the  amount  of  time  given  to  the  con- 
suming processes.  It  would  be  mere  foolishness  for  a  tired 
worker  to  spend  money  upon  improving  books  which  he  had 
not  the  time  and  energy  to  digest.  Shorten  his  hours,  leave  him 
more  energy,  such  expenditure  may  be  extremely  profitable. 
Even  the  enjoyment  and  good  of  his  meals  will  be  increased,  if 
he  has  more  time  and  energy  for  wholesome  processes  of  digestion 
and  for  the  exercise  which  facilitates  digestion.  And  what  is 
true  of  his  food  will  hold  also  of  most  other  items  in  his  standard 
of  consumption.  No  consumption  is  purely  passive:  to  get  the 
best  utility  or  enjoyment  out  of  any  sort  of  wealth,  time  and 
energy  are  requisite.  The  greater  part  of  a  workman's  income 
goes  to  the  upkeep  of  his  home  and  family.  Does  the  normal 
work-day  in  our  strenuous  age  permit  the  bread-winner  to  get 
the  full  enjoyment  out  of  home  and  family?  He  belongs  per- 
haps to  a  club  or  a  cooperative  society.  Can  he  make  the  most 
of  these  opportunities  of  education  and  of  comradeship,  if  his 
daily  toil  leaves  him  little  margin  of  vitality?  Most  of  the  grow- 
ing public  expenditure  which  the  modern  State  or  City  lays  out 
upon  the  amenities  of  social  life,  the  apparatus  of  libraries, 
museums,  parks,  music  and  recreation,  is  half  wasted  because 
industry  has  trenched  too  much  upon  humanity. 

§  6.  More  leisure  means  an  increased  fund  of  utility  or  welfare 
got  out  of  the  income  at  the  disposal  of  each  worker. 

This  introduces  us  to  the  fuller  economy  of  leisure  regarded 
as  the  opportunity  of  opportunities — the  condition  of  all  effective 
social  reconstruction  and  progress. 


THE  DISTRIBUTION  OF  LEISURE  237 

Consider  it  first  in  relation  to  industrial  welfare.  We  have 
seen  how  society  enforces  its  claims  upon  the  worker  by  division 
of  labour  and  specialisation  of  functions.  This  specialisation  is 
usually  justified  by  the  variety  of  consumption  which  it  yields. 
But  will  not  this  more  complex  and  refined  consumption  in 
large  part  be  wasted  or  perverted  to  base  ends,  if  the  producer 
becomes  ever  narrower  in  his  productive  function? 

The  Organic  Law  presses  here  insistently.  It  would  be  going 
too  far,  doubtless,  to  assert  that  he  who  can  produce  one  thing 
can  only  consume  one  thing.  But  everyone  familiar  with  the 
finer  arts  of  Consumption  will  admit  that  a  consumer  who  is 
utterly  unskilled  in  the  production  of  these  goods  cannot  extract 
from  their  consumption  the  full  enjoyment  or  utility  which  they 
contain.  A  true  connoisseur  of  pictures  must,  in  training  and 
in  study,  be  a  good  deal  of  an  artist:  the  exquisite  gourmet  must 
be  something  of  a  cook. 

In  other  words,  our  industrial  civilisation  offers  a  dangerous 
paradox,  if  it  merely  presents  man  exposed  to  two  opposed 
forces,  tending  on  the  one  hand  to  greater  narrowness  of  pro- 
duction, on  the  other,  to  greater  width  and  complexity  of  con- 
sumption. To  solve  this  paradox  is  the  first  service  of  the  large 
new  fund  of  leisure  which,  for  the  first  time  in  history,  the  new 
economies  of  industry  render  available  not  for  a  little  class  but 
for  whole  peoples. 

The  first  use  of  leisure,  then,  is  that  it  supplies  a  counterpoise 
to  specialisation  by  the  opportunity  it  gives  for  the  exercise  of 
the  neglected  faculties,  the  cultivation  of  neglected  tastes.  As 
the  specialisation  grows  closer,  this  urgency  increases.  More 
leisure  is  required  for  the  routine  worker  to  keep  him  human. 

In  the  first  place,  it  must  afford  him  relaxation  or  recreation 
by  occupations  in  which  the  spontaneity,  the  liberty,  the  elements 
of  novelty,  increasingly  precluded  from  his  work-day,  shall  find 
expression.  It  must  liberate  him  from  automatism,  and  afford 
him  opportunity  for  the  creative  and  interesting  work  required 
to  preserve  in  him  humanity. 

An  eight-hours  day  would  mean  that  thousands  of  men,  who 
at  present  leave  the  factory  or  furnace,  the  office  or  the  shop, 
in  a  state  of  physical  and  mental  lassitude,  would  take  a  turn  at 


238  WORK  AND  WEALTH 

gardening,  or  home  carpentry,  would  read  some  serious  and 
stimulating  book,  or  take  part  in 'some  invigorating  game. 

Thus  each  man  would  not  merely  get  more  out  of  each  item 
of  his  economic  consumption,  but  he  would  add  to  the  net  sum 
of  his  humanity,  and  incidentally  of  his  economic  utility,  by  cul- 
tivating those  neglected  faculties  of  production  which  yield  him 
a  positive  fund  of  interest  and  human  benefit. 

§  7.  So  far  I  have  set  forth  the  economy  of  leisure  from  the 
standpoint  of  physical  and  moral  health:  the  order  and  harmony 
of  human  powers.  This,  however,  is  in  the  main  a  statical 
economy.  Now,  Order  is  chiefly  valuable  as  the  means  of  Pro- 
gress, Health  as  the  means  of  Growth.  The  dynamic  economy 
of  Progress  demands  leisure  even  more  insistently. 

Everyone  will  formally  admit  that  Education  is  impossible 
without  leisure.  It  is  often  pointed  out  that  the  Greek  word 
which  has  been  converted  into  our  word  '  School '  means  Leisure. 
One  might,  therefore,  suppose  that  the  utmost  care  would  be 
taken  to  get  the  fullest  use  out  of  the  leisure  which  child-life 
affords,  and  to  ensure  that  throughout  life  there  should  remain 
a  sufficient  supply  of  this  raw  material  of  progress — the  surplus 
energy  beyond  the  bare  needs  of  existence  needed  for  organic 
growth. 

The  prodigal  waste  of  this  sacred  store  of  leisure  for  child-life 
in  the  processes  of  our  Elementary  Education  is  only  too  familiar 
to  all  of  us.  Mr.  Stephen  Reynolds  1  hardly  overstates  the  case 
when  he  says, '  It  gives  to  the  children  about  three  years '  worth 
of  second-rate  education  in  exchange  for  eight  or  nine  years  of 
their  life. ' 2 

I  believe  that  the  trained  educationalist  of  the  next  genera- 
tion, examining  the  expensive  education  given  even  in  the  best- 
equipped  of  our  secondary  schools  and  our  universities,  in  the 
light  of  a  more  rational  conception  of  human  progress,  will  find 

1  (Times,  23  Dec.  1912.) 

2  The  best  that  can  be  said  for  this  education  has  recently  been  said  by  Mr.  George 
Peel,  who  writes  of  London  children  (The  Future  of  England,  p.  96) : 

'They  spend  28  hours  a  week  continuously  during  nine  years  under  fairly  satis- 
factory conditions  of  air,  warmth  and  light,  engaged  in  wholesome  and  stimulating 
pursuits.  Considering  what  their  homes  often  are,  this  itself  must  be  reckoned  an 
immense  benefit.' 


THE  DISTRIBUTION  OF  LEISURE  239 

at  least  as  large  a  waste  of  opportunity  in  these  seats  of  learning 
as  in  our  elementary  schools.  Not  until  educational  standards  and 
methods  are  better  adjusted  to  true  conditions  of  the  vital  pro- 
gress of  individuals  and  of  societies,  will  the  chief  significance 
of  leisure  be  realised. 

§  8.  But  the  value  of  leisure  is  by  no  means  exhausted  by 
these  considerations.  The  finest  fruits  of  human  life  come  not 
by  observation.  To  lay  out  all  our  spare  time  and  energy  to  the 
very  best  advantage  by  a  scrupulous  seizure  of  opportunities  is 
in  reality  a  false  economy.  Industrialism  has  undoubtedly  done 
much  both  to  discipline  and  to  educate  the  powers  of  man.  But 
it  has  preached  too  arrogantly  the  gospel  of  economy  and  in- 
dustry. It  is  not  good  for  any  man  to  account  for  his  time  either 
to  himself  or  to  another,  with  too  great  exactitude,  or  to  seek  to 
make  a  mosaic  of  his  days.  The  Smilesian  philosophy  of  thrift 
and  industry  imparts  more  calculation  into  life  than  is  good  for 
man.  We  should  not  be  so  terribly  afraid  of  idleness.  Dr.  Watts 
held  that  'Satan  finds  some  mischief  still  for  idle  hands  to  do.' 
But  far  saner  is  Wordsworth's  view,  '  that  we  can  feed  this  mind 
of  ours  in  a  wise  passiveness,'  and  Thoreau's  demand  for  a 
'broad  margin  of  life.' 

We  are  not  yet  sufficiently  advanced  in  psychology  to  know 
much  of  the  processes  within  the  mind  by  which  novel  thoughts 
and  feelings  seem  to  enter  of  their  own  accord,  starting  new  im- 
pulses to  action,  or  by  which  the  unchecked  imagination  works 
along  some  rapid  line  of  intuition.  But  that  such  seasons  of 
vacancy  and  reverie  are  essential  to  many  of  the  finest  processes 
of  the  intellect  and  heart,  is  indisputable.  To  deny  this  to  any 
man  is  to  deprive  him  of  a  part  of  his  rightful  heritage  of  human 
opportunity.  The  inventor,  the  poet,  the  artist,  are  readily 
allowed  such  free  disposal  of  time.  Everyone  allows  that  genius 
must  have  ample  periods  of  incubation.  But  the  implication 
that  common  men  ought  to  have  their  faces  kept  to  the  grind- 
stone is  quite  false.  Everybody  wants  leisure  for  his  soul  to 
move  about  in  and  to  grow,  not  by  some  closely  prescribed  plan 
of  education,  but  by  free  experimentation  of  its  secret  powers. 
A  very  slender  harvest  of  happy  thoughts  and  feelings  will 
justify  much  apparent  idleness. 


24o  WORK  AND  WEALTH 

In  the  narrower  investigation  of  methods  of  industry  which 
we  essayed,  we  realised  the  critical  part  played  by  leisure  in  the 
art  of  invention.  The  lack  of  leisure  for  the  great  majority  of 
workers  is  assuredly  a  waste  of  inventive  power.  We  think  our 
society  prolific  in  inventions,  especially  in  the  age  we  are  living 
in,  but  it  is  likely  that  the  pace  of  progress  through  industrial 
inventions  would  be  greatly  quickened  if  the  proper  play-time 
of  the  mind  were  not  denied  to  the  great  majority  of  men  and 
women. 

Biologists  and  psychologists  have  made  many  interesting  en- 
quiries into  the  motives  that  prompt  animals  and  human  beings 
to  play.  The  forms  of  play,  the  rhythm  or  patterns  into  which 
the  organic  cooperations  of  muscular  and  nervous  tensions  and 
discharges  cast  themselves,  are  found  to  have  some  direct  re- 
lation to  the  serious  pursuits  of  adult  life,  the  protection  against 
enemies,  the  pursuit  of  prey  and  other  food,  courtship,  mating 
and  the  care  of  the  young,  and  the  corporate  movements  nec- 
essary for  the  protection  of  the  horde  or  tribe.  So  interpreted, 
play  is  an  instinctive  education  for  life.  Nature  is  full  of  in- 
directness, and  a  great  deal  of  this  play  is  not  closely  imitative 
of  any  particular  sort  of  useful  activity  but  is  directed  to.  general 
fitness.  This  applies  particularly  to  the  higher  animals  who  are 
less  exclusively  directed  by  separate  particular  instincts  and  are 
liable  to  have  to  meet  novel  and  irregular  emergencies  that  call 
for  general  adaptability  of  body  and  of  mind.  The  play  of  higher 
animals  and  especially  of  human  young  will  thus  run  largely 
into  forms  in  which  the  intellectual  and  emotional  powers  will 
have  large  scope,  where  spontaneous  variation  and  free  imagina- 
tion will  express  themselves,  and  where  the  more  or  less  routine 
rhythms  of  the  primitive  dance  or  song  or  mock  fight  will  pass 
into  higher  forms  of  individual  cunning  and  competitive  exploit, 
having  as  their  main  biological  and  social  'meaning'  the  practice 
of  an  efficient  mental  and  emotional  equipment.  Play  thus  con- 
sidered is  an  experimentation  of  vital  powers.  Its  utility  for 
child-life  is  commonly  admitted.  In  fact,  there  is  a  grave  danger 
lest  the  spontaneity  and  instinctive  direction  which  nature  has 
implanted  should  be  damaged  by  the  attempts  of  education- 
alists to  force  the  vital  utility  of  play  by  organising  it  into 


THE  DISTRIBUTION  OF  LEISURE  241 

'set  games.'  Though  we  need  not  rudely  rule  out  reasonable 
regulation  from  this,  as  from  any  other  department  of  life,  it 
would  be  well  to  remember  that  play  has  powerful  directive 
instincts  behind  it  in  child-life  which  adult  notions  of  economy 
may  gravely  misconceive  and  injure  by  over-regulation.  Hasty 
endeavours  to  displace  instinct  by  reason  in  child-life  are  likely 
to  prove  costly  to  human  welfare  in  the  long  run.  The  spon- 
taneous joy  of  those  activities  of  childhood  that  seem  most 
'wasteful'  is  probably  a  far  better  index  to  welfare  than  any 
pedagogic  calculations. 

But  because  the  human  utility  of  play  is  great  for  children, 
it  does  not  follow  that  it  is  small  for  men  and  women.  Even  the 
physiological  and  much  more  the  psychological  utility  of  play 
lasts  through  life,  though  doubtless  in  diminishing  value.  For 
adult  workers  mere  repose  never  exhausts  the  use  of  leisure. 
The  biological  or  the  social  utility  of  his  play  may  be  much 
smaller  than  in  the  case  of  the  young.  But  it  will  remain  con- 
siderable. Nor  is  this  utility  chiefly  expressed  in  the  relation 
between  play  and  invention.  The  chief  justification  for  leisure 
does  not  consist  in  its  contribution  to  the  arts  of  industry  but 
rather  in  raising  the  banner  of  revolt  against  the  tyranny  of 
industry  over  human  life. 

§  9.  We  have  grown  so  accustomed  to  regard  business  as 
the  absorbing  occupation  of  man,  that  which  necessarily  and 
rightly  claims  the  major  part  of  his  waking  hours,  that  a  so- 
ciety based  on  any  other  scale  of  values  seems  inconceivable. 
Though  history  has  made  us  familiar  with  civilisations,  such 
as  those  of  Athens  and  of  Rome,  where  a  large  body  of 
free  citizens  regarded  politics,  art,  literature  and  physical 
recreations  as  far  more  important  occupations,  we  know  that 
such  civilisations  rested  on  a  basis  of  slave  labour.  We  do 
not  seem  to  realise  that  for  the  first  time  in  history  two 
conditions  are  substantially  attained  which  make  it  technically 
possible  for  a  whole  people  to  throw  off  the  dominion  of  toil. 
Machinery  and  Democracy  are  these  two  conditions.  If  they 
can  be  brought  into  effective  coordination,  so  that  the  full  eco- 
nomics of  machine  production  can  be  rendered  available  for  the 
people  as  a  whole,  the  domination  of  Industry  over  the  lives,  the 


242  WORK  AND  WEALTH 

thoughts,  and  the  hearts  of  men,  can  be  overthrown.  This  is  the 
great  problem  of  social-economic  reconstruction,  to  make  in- 
dustry the  servant  of  all  men,  not  the  servants  of  the  few,  the 
masters  of  the  many.  Its  solution  demands,  of  course,  that 
after  the  wholesome  organic  needs  are  satisfied,  the  stimulation 
of  new  material  wants  shall  be  kept  in  check.  For  if  every  class 
continues  constantly  to  develop  new  complicated  demands, 
which  strain  the  sinews  of  industry  even  under  a  socially-ordered 
machine-economy,  taking  the  whole  of  its  increased  control  of 
Nature  in  new  demands  upon  Nature  for  economic  satisfaction, 
the  total  burden  of  Industry  on  Man  is  nowise  lightened.  If  we 
are  to  secure  adequate  leisure  for  all  men,  and  so  to  displace  the 
tyranny  of  the  business  life  by  the  due  assertion  of  other  higher 
and  more  varied  types  of  life,  we  must  manage  to  check  the  lust 
of  competitive  materialism  which  Industrialism  has  implanted 
in  our  hearts. 

I  am  aware  how  difficult  it  is  to  translate  these  handsome 
aspirations  into  practical  achievement.  To  urge  the  working- 
classes  of  this  country,  or  even  considerable  sections  of  the 
middle-classes  engaged  in  the  trades  and  professions,  to  sacrifice 
some  immediately  attainable  rise  in  their  material  and  intellect- 
ual standard  of  comfort,  in  order  thereby  to  purchase  more 
leisure,  will  be  taken  to  indicate  a  blank  ignorance  of  the  actual 
conditions  of  their  lives.  I  shall  be  reminded  that  recent  sta- 
tistics of  wages  in  this  country  show  that  about  one-third  of  our 
working-class  families  are  living  upon  precarious  weekly  incomes 
amounting  to  less  than  255.  a  week,  and  that  this  computation 
does  not  take  into  account  a  large  body  of  the  population  living 
upon  casual  earnings  indefinitely  lower  than  this  sum.  Now  Mr. 
Rowntree  and  other  searchers  into  working-class  expenditure 
have  shown  that  255.  will  hardly  purchase  for  an  ordinary  family 
in  any  English  town  a  sufficiency  of  food,  clothing,  housing, 
fuel  and  other  requisites  to  maintain  its  members  in  full  physical 
efficiency.  It  will  seem  idle  to  contend  that  working-people  in 
this  case  would  do  well  to  prefer  a  shortening  of  their  working 
day,  however  long  it  be,  to  an  increase  of  their  wages.  None  of 
the  considerations  I  have  urged  relating  to  the  better  utilisation 
of  their  consumption  will  be  held  to  justify  so  obviously  wasteful 


THE  DISTRIBUTION  OF  LEISURE  243 

a  policy.  These  workers  simply  cannot  afford  to  buy  more  leisure 
at  so  high  a  price.  They  dare  not  sacrifice  any  fraction  of  their 
current  wages  to  procure  a  reduction  of  hours  from  ten  hours  to 
eight,  even  if  the  conditions  of  their  trade  otherwise  admitted 
such  a  change;  and  if  increasing  prosperity  in  their  trade  presents 
them  with  the  option  of  obtaining  higher  wages  or  shorter  hours, 
their  pressing  demands  for  better  food  and  housing  will  rightly 
compel  them  to  choose  the  former  of  the  two  alternatives. 

Nor  is  this  reasoning  refuted  by  dwelling  upon  the  undeniable 
facts,  that  most  standards  of  working-class  comfort  contain 
elements  of  conventional  consumption  which  might  be  cut  out 
with  positive  advantage,  and  that,  apart  from  this,  a  more  in- 
telligent housekeeping  would  enable  most  of  them  to  do  much 
better  with  their  actual  incomes  than  they  do.  For  when  a  due 
allowance  has  been  made  for  such  errors  or  extravagance,  the 
ordinary  labourer's  wage  in  town  and  in  country  still  remains 
below  the  margin  of  family  efficiency.  Of  course,  in  almost 
every  occupation  there  will  be  a  considerable  number  of  workers 
who,  having  no  family  dependent  on  them,  will  have  some  means 
at  their  disposal  for  comforts,  luxuries,  saving  or  leisure.  But 
the  normal  standard  wage  for  unskilled  or  low-skilled  labour  in 
this  country  does  not  appear  to  have  attained  a  height  at  which 
the  purchase  of  a  shorter  working  day  is  sound  economy.  We 
must  always  bear  in  mind,  besides,  that  the  existence  in  a  trade 
of  even  a  considerable  minority  of  workers  who  could  afford  to 
take  in  increased  leisure  what  they  might  take  in  enhanced  wages, 
would  not  make  this  step  practicable  or  desirable.  For  most 
trades  are  now  so  organised  that  a  common  standard  working 
day  is  even  more  essential  than  a  uniform  rate  of  wages. 

These  facts  enable  us  to  realise  why  it  is  that  so  much  elas- 
ticity or  ambiguity  attends  the  actual  labour  movement  for  a 
shorter  working  day.  The  demand  is  seldom  framed  in  such  a 
way  as  to  preclude  the  common  use  of  over-time,  though  such  a 
use  of  course  defeats  the  aim  for  leisure,  converting  it  into  an 
aim  for  higher  wages,  the  time  and  a  half  rate  usually  paid  for 
over-time. 

But,  though  this  open  or  secret  competition  between  more 
leisure  and  more  wages  continues  to  take  place  in  trades  where 


244  WORK  AND  WEALTH 

general  conditions  of  labour  are  improving,  the  relative  strength 
of  the  claim  for  leisure  is  advancing.  There  comes  a  point  in  the 
improved  conditions  of  each  working-class  when  the  demand  for 
liberty  and  ease  and  recreation  begins  to  assert  itself  with  so 
much  insistence  that  it  outweighs  some  part  of  the  chronic  de- 
mand for  higher  wages.  Though  workers  are  usually  reluctant  to 
admit  the  economic  necessity  of  making  a  wage-sacrifice  in  order 
to  purchase  leisure,  and  will  hardly  ever  claim  a  shorter  day,  if 
they  know  it  to  involve  an  actual  fall  of  wages,  they  will  some- 
times risk  this  fall,  and  more  often  they  will  forego  a  portion  of 
a  contemplated  rise  of  wage,  so  as  to  get  a  shorter  day.  The 
strength  and  effectiveness  of  this  demand  for  leisure  in  com- 
parison with  wages  must,  of  course,  vary  with  the  actual  standard 
of  comfort  that  obtains,  the  onerousness  or  irksomeness  of  the 
work,  the  age,  sex  and  intelligence  of  the  workers,  and  the  va- 
riety and  sorts  of  opportunities  which  increased  leisure  will 
place  at  their  disposal.  In  the  ordinary  English  feudal  village, 
or  even  in  the  small  country  town,  leisure  commonly  means 
torpor  qualified  by  the  public-house.  The  price  of  such  leisure, 
in  terms  of  sacrifice  of  wage,  would  be  very  low,  for  the  utility  in 
the  sensational  enjoyment  of  the  leisure  would  be  slight  as  com- 
pared with  the  substantial  addition  to  the  material  standard  of 
family  comfort  which  even  a  shilling  would  afford.  On  the  other 
hand,  to  the  better-paid  mechanic,  compositor,  or  skilled  factory 
worker,  where  the  family  wage  was  relatively  high,  and  where 
organised  city  life  presented  many  opportunities  for  the  use  and 
enjoyment  of  leisure,  it  might  seem  well  worth  while  to  pay 
something  in  cash  for  the  advantage  of  a  longer  evening. 

§  10.  This  problem,  of  course,  is  merely  one  illustration  of  the 
complicated  issues  which  arise  in  any  orderly  study  of  the 
human  economics  of  class  and  individual  standards  of  consump- 
tion. Even  such  a  merely  cursory  glance  at  this  delicate  organic 
problem  will  serve  to  expose  the  fatuity  of  so  much  of  the  crude 
dogmatic  criticism  lavished  upon  working-class  economy  by 
well-to-do  reformers  who  have  not  sufficient  imagination  or 
discretion  to  abstain  from  applying  the  standards  of  valuation 
appropriate  to  an  income  of  £1,000  a  year  to  a  family  living  upon 
£60  a  year.  The  exact  income-point  where  a  West  Ham  worker 


THE  DISTRIBUTION  OF  LEISURE  245 

can  afford  to  observe  the  legal  requirements  against  overcrowding 
by  hiring  another  room,  where  he  can  join  a  Club  with  a  reason- 
able chance  of  keeping  up  the  subscriptions,  where  he  can  afford 
to  keep  the  boys  or  girls  at  school  beyond  the  legal  age-limit, 
such  questions  cannot  be  settled  by  general  maxims  as  to  the 
duty  of  thrift  or  the  advantages  of  education,  or  even  the  dangers 
of  bad  sanitation.  It  must  be  remembered  that  even  in  this 
highly-civilised  and  Christian  land  there  are  still  some  millions  of 
people  who  cannot  afford  to  set  aside  anything  for  a  rainy  day, 
or  to  let  their  children  enjoy  the  education  which  the  State 
freely  provides,  or  even  to  obey  some  of  the  fundamental  laws 
of  health.  As  the  family  wage  rises  beyond  a  bare  minimum  of 
current  subsistence,  a  point  will  emerge  where  each  of  these  and 
many  other  sound  practices  becomes  economically  feasible:  the 
particular  income-point,  of  course,  will  differ  with  each  family 
according  to  its  composition,  its  needs,  and  the  opportunities 
of  meeting  them. 

What  applies  so  evidently  to  the  narrow  incomes  of  the  wage- 
earners  is,  of  course,  equally  applicable  to  the  higher  incomes 
of  other  classes.  The  well-to-do  professional  man  recognises 
that  an  annual  expenditure  of  five  or  even  ten  per  cent  of  his 
income  on  holidays  may  be  a  sound  economy,  just  as  he  cal- 
culates that  he  is  doing  better  for  his  son  by  spending  £1,000  on 
his  professional  training  than  by  putting  him  to  business  at 
sixteen  with  the  same  sum  for  capital.  Not  only  is  it  impossible 
to  generalise  for  a  whole  people,  or  for  all  families  in  a  given 
trade  or  of  a  given  income,  but  there  will  be  no  two  cases  where 
a  rising  income  ought  to  be  laid  out  precisely  in  the  same  way. 
This  is  of  course  nothing  else  than  saying  that,  as  no  two  persons, 
or  families,  are  precisely  alike  in  physical  and  moral  make-up, 
in  tastes,  needs,  opportunities,  their  expenditure  cannot  rightly 
be  the  same. 

Though  this  belongs  to  the  most  obvious  of  common-places, 
none  is  more  habitually  ignored.  And  that  neglect  is  largely  due 
to  the  fact  that  the  platitudinarian  moralist  has  always  been 
allowed  to  have  a  free  run  in  the  region  of  commentary  on  ex- 
penditure. 

Eulogia  of  thrift  and  industry  have  been  as  indiscriminate 


246  WORK  AND  WEALTH 

and  as  unprofitable  as  diatribes  against  luxury  and  idleness. 
What  is  needed  is  a  flow  of  orderly  investigation  into  the  real 
needs  and  capacities  of  the  individuals  and  groups  who  constitute 
industrial  society,  not  confined  to  the  hard  facts  which  can  be 
tabulated  and  plotted  in  curves  but  taking  count  of  those  softer 
and  more  plastic  facts  which  a  closer  study  of  human  life  will 
always  show  as  the  main  determinants  of  any  art  of  conduct. 

The  place  of  leisure  in  the  organic  standard  of  a  group  or  class 
or  nation  will  be  one  of  the  most  delicate  problems  in  sucha  study. 
Its  delicacy  for  the  individual  economy  may,  indeed,  be  deduced 
from  the  expression  which  we  used  at  the  outset  of  this  treatment, 
in  describing  it  as  'the  opportunity  of  opportunities.'  In  other 
words,  its  human  utility  to  any  man,  and,  therefore,  its  impor- 
tance, relative  to  his  wages  or  any  other  good  he  gets  from  them, 
will  depend  upon  the  nature  of  all  the  opportunities  it  opens  up, 
and  that  in  its  turn  depends  upon  the  entire  sum  of  those  con- 
ditions which  we  name  his  Nature  and  his  Environment. 

The  progressive  achievement  of  this  economy  of  leisure  is 
closely  linked  with  a  gradual  reorganisation  of  industry  so  as  to 
eliminate  the  large  waste  of  time  and  energy  which  present  pro- 
ductive methods  involve.  With  science  and  humanity  co- 
operating in  the  art  of  social  organisation  it  ought  to  be 
possible  to  effect  such  economies  as  would  place  all  English- 
men in  private  possession  of  the  greater  part  of  their 
waking  day  for  their  own  purposes  in  life.  It  requires, 
however,  a  genuine  faith  in  the  organic  progress  of  Human 
Nature  to  urge  with  confidence  the  fuller  measure  of  such 
a  reform.  We  need  at  least  to  assume  that  the  normal  tendency 
will  be  towards  the  use,  not  the  abuse,  of  more  leisure,  as  of 
higher  wages.  That  some  waste  will  be  incurred  in  learning  to 
use  leisure,  as  also  in  building  up  each  stage  in  a  rising  standard 
of  expenditure,  is  of  course  inevitable.  Much  might  be  said 
about  the  conditions  which  facilitate  the  assimilation  both  of 
leisure  and  of  wages  to  nourish  a  higher  human  life.  Race, 
climate,  social  traditions  and  surroundings,  the  nature  of  the 
work,  age,  sex  and,  indeed,  many  other  conditions,  must  help 
to  determine  how  a  given  shortening  of  hours,  or  enhancement 
of  wages,  will  affect  the  standard  of  life.  Some  crude  distinc- 


THE  DISTRIBUTION  OF  LEISURE  247 

tions  of  great  significance  have  been  observed.  The  Bantu  and 
most  other  Africans,  new  to  processes  of  wage-labour  and  to  the 
needs  of  civilised  life,  will  take  the  whole  of  a  sudden  rise  of 
wages  in  increased  leisure,  but  that  leisure  will  be  spent  almost 
wholly  in  idleness.  Pushful  German  traders  in  tropical  countries 
commonly  complain  of  the  'verdammte  Bedurfnislosigkeit'  (ac- 
cursed wantlessness)  of  the  inhabitants.  This  low  conservative 
standard  of  living  impedes  economic  processes  of  exchange. 
It  also  precludes  the  fruitful  use  of  leisure,  the  satisfaction  of 
the  non-economic  needs.  Though  there  is  no  reason  to  hold 
that  any  race  or  type  of  man  is  unprogressive,  in  the  sense  that 
his  mind  is  impervious  to  new  wants  and  is  incapable  of  inciting 
him  to  new  efforts  for  their  satisfaction,  the  extent  and  pace  of 
such  progress  vary  greatly  with  the  economic  environment  and 
with  the  degree  of  conscious  culture  hitherto  attained.  The 
stimuli  of  economic  needs  and  of  non-economic  needs  will  nor- 
mally proceed  together,  and  in  the  masses  of  a  working  popula- 
tion will  manifest  themselves  in  a  simultaneous  demand  for 
higher  wages  and  more  leisure.  But  as  wages  reach  a  tolerably 
high  standard  of  economic  comfort,  it  might  be  expected  that  the 
relatively  stronger  pressure  of  the  non-economic  needs  would 
give  increasing  emphasis  to  the  demand  for  a  shorter  and  easier 
working  day.  This,  indeed,  will  seem  to  accord  with  the  general 
claim  which  socialists  as  well  as  individualists  make  for  progress- 
ive industrialism,  that  it  shall  make  larger  provision  for  personal 
liberty  and  self-development.  As  specialised  and  regimented 
industry  represents  the  direct  economic  service  each  must  render 
to  society,  the  demands  of  expanding  personality  are  held  to 
require  that  an  increasing  proportion  of  each  man's  time  and 
energy  shall  be  put  at  his  disposal. 

§  ii.  No  abstract  considerations  indeed,  can  be  adduced  to 
support  an  indefinite  reduction  of  the  work-day.  As  a  high  level 
of  civilisation  is  attained  in  any  community,  the  proportion 
of  energy  devoted  to  material,  as  compared  with  non-material 
commodities  and  services,  will  doubtless  be  reduced.  But  that 
does  not  necessarily  imply  a  corresponding  reduction  of  eco- 
nomic time  and  activity.  For  among  economic  goods  them- 
selves, those  which  are  wholly  or  mainly  non-material  will 


248  WORK  AND  WEALTH 

form  an  increasing  proportion  of  the  whole.  A  community  like 
that  of  Great  Britain,  with  a  population  declining  in  its  growth, 
will  tend  to  take  a  continually  increasing  share  of  its  real  income 
in  the  shape  of  intellectual,  moral,  aesthetic,  recreative,  and 
other  non-material  services.  These  will  absorb  an  ever-growing 
share  of  the  productive  energy  of  the  people.  This  demand  for 
the  satisfaction  of  higher  economic  needs  will  be  likely  to  put  a 
check  upon  the  tendency  towards  an  illimitable  reduction  of  the 
work-day.  For  most  of  these  higher  non-material  goods  do  not 
admit  the  application  of  those  economies  of  capitalist  produc- 
tion available  in  the  making  of  material  goods.  Take  one  ex- 
ample, that  of  education.  Here  is  a  sendee  which  will  probably 
absorb  a  continually  increasing  percentage  of  the  total  time  and 
energy  devoted  to  economic  services.  The  same  is  probably 
true  of  hygienic  services.  Though  portions  of  these  and  other 
activities  may  pass  from  the  economic  into  the  non-economic 
sphere,  being  undertaken  by  individuals  as  private  occupations, 
for  their  leisure,  as  public  services  they  will  certainly  furnish 
employment  to  an  increasing  number  of  employees. 

Thus  the  claims  of  a  growing  progressive  social  organisation 
will  impose  some  necessary  limits  upon  the  demands  of  the  in- 
dividual for  larger  liberty  and  leisure. 

There  is,  however,  no  final  conflict  between  the  claims  of 
personal  liberty  and  the  social  order.  Even  though  the  process 
of  readjustment  between  the  claims  of  industry  and  leisure 
should  incline  generally  in  favour  of  more  leisure,  with  the  prime 
purpose  of  nourishing  more  fully  the  private  personality  and 
affording  larger  scope  for  home  life  and  recreation,  society  is 
not  thereby  the  loser.  For  some  of  the  finest  and  most  profitable 
uses  of  leisure  will  consist  of  the  voluntary  rendering  of  social 
services  of  a  non-economic  order.  I  allude  in  particular  to  a 
fuller  participation  in  the  active  functions  of  citizenship,  a  more 
intelligent  interest  in  local  and  national  politics,  in  local  adminis- 
tration and  in  the  numerous  forms  of  voluntary  association 
which  are  generally  social  in  the  services  they  render.  More 
leisure  is  a  prime  essential  of  democratic  government.  There 
can  be  no  really  operative  system  of  popular  self-government 
so  long  as  the  bulk  of  the  people  do  not  possess  the  spare  time 


THE  DISTRIBUTION  OF  LEISURE  249 

and  energy  to  equip  themselves  for  effective  participation  in 
politics  and  to  take  a  regular  part  in  deliberative  and  admin- 
istrative work.  This  is  equally  applicable  to  other  modes  of 
corporate  activity,  the  life  of  the  churches,  friendly  societies, 
trade  unions,  cooperative  societies,  clubs,  musical  and  educa- 
tional associations,  which  go  to  make  up  the  social  life  and  in- 
stitutions of  a  country.  Leisure,  demanded  primarily  in  the 
interests  of  the  individual  for  his  personal  enjoyment,  will  thus 
yield  rich  nutriment  to  the  organic  life  of  society,  because  the 
individual  will  find  himself  drawn  by  the  social  needs  and  de- 
sires embedded  in  his  personality  to  devote  portions  of  his  leisure 
to  social  activities  which  contribute  to  the  commonwealth  as 
surely  as  do  the  economic  tasks  imposed  upon  him  in  his  daily 
industry. 


CHAPTER  XVI 

THE  RECONSTRUCTION  OF  INDUSTRY 

PART  I 

CAPITAL  AND  LABOUR 

§  i.  Since  industry  is  a  great  cooperative  process  for  the 
mutual  aid  of  members  of  society,  it  is  well  that  the  fact  should 
be  held  in  the  consciousness  and  will  of  individuals  as  clearly  as 
possible.  For  this  conscious  realisation  of  the  meaning  of  in- 
dustry will  have  a  helpful  influence  on  their  intelligence  and 
feelings. 

Now  there  are  general  related  tendencies  in  modern  industry 
which  are  powerful  obstacles  to  this  realisation  of  the  social 
meaning  of  industry. 

The  first  is  the  growing  subdivision  of  labour  with  the  related 
expansion  of  markets.  When  a  man  made  a  watch  or  a  pair  of 
shoes  and  sold  them  to  a  neighbour,  or  known  customer,  his 
work  had  for  him  a  distinct  human  significance.  For,  making 
the  whole  of  a  thing,  he  realised  its  nature  and  utility,  while, 
seeing  the  man  who  wore  his  watch  or  shoes,  he  realised  the 
human  value  of  his  work.  Now  he  performs  one  of  some  ninety 
processes  which  go  to  make  many  watches,  or  he  trims  the  heels 
of  innumerable  shoes.  The  other  processes  he  cannot  do,  and 
does  not  accurately  know  how  they  are  done.  His  separate  con- 
tribution has  no  clear  utility,  and  yet  it  solely  occupies  his 
attention.  Not  only  does  he  thus  lose  grasp  of  the  meaning  of 
his  work,  but  he  has  no  opportunity  of  realising  its  consumptive 
utility.  For  he  cannot  know  or  care  anything  about  the  un- 
known person  in  some  distant  part  of  the  world  who  shall  wear 
the  boots  or  watch  he  helped  to  make.  The  social  sympathy  of 
cooperative  industry  is  thus  atrophied  by  the  conditions  of  his 
work.  Division  of  labour,  in  its  first  intent,  thus  divides  each 

250 


-oLLECse 

"ORNIA 

THE  RECONSTRUCTION  OFlNDUSTRT"     ~2 


worker  into  a  section  of  a  producer,  and  separates  each  set  of  pro- 
ducers from  the  consumers  of  their  products. 

Though,  therefore,  this  division  of  labour  is  in  itself  a  finer 
mode  of  cooperation,  it  is  not  realised  as  such  by  those  who  are 
subjected  to  it. 

§  2.  The  second  dehumanising  and  derationalising  influence 
is  the  stress  which  the  operations  of  modern  industry  lay  on 
competition  between  trade  and  trade,  business  and  business, 
worker  and  worker.  No  graver  injury  has  been  inflicted  on  the 
mind  of  man,  hi  the  name  of  science,  than  the  prepotence  which 
the  early  science  of  Political  Economy  assigned  to  the  competi- 
tive and  combative  aspects  of  industrial  life.  To  represent 
commerce  between  individuals  and  nations  as  a  'competitive 
system,  '  mainly  dependent  for  its  sucessful  operation  upon  the 
absorption  of  each  man  in  seeking  his  own  gain,  and  in  getting 
the  better  of  others  in  his  trade,  was  an  error  of  the  first  magni- 
tude. Nor  was  this  error  sufficiently  corrected  by  the  qualifying 
theory  that  from  this  pursuit  by  each  of  his  separate  gains  the 
greatest  good  for  all  would  somehow  emerge.  For,  by  laying  the 
stress  upon  the  competitive  aspect  of  industry,  this  teaching 
stifled  the  growth  of  intellectual  and  moral  sympathy  between 
the  various  human  centres  of  the  industrial  system,  and  im- 
paired the  sense  of  human  solidarity  which,  apart  from  its  spirit- 
ual value,  is  the  mainspring  of  efficient  economic  organisation. 
The  presentation  of  industry  as  competition  with  attendant 
cooperation,  instead  of  as  cooperation  with  attendant  competi- 
tion, has  greatly  contributed  to  the  popular  misunderstanding 
of  commerce,  alike  upon  its  domestic  and  its  international 
scales.1 

Competition,  if  defended  as  a  socially  useful  method  of  in- 
dustry, must,  like  division  of  labour,  be  proved  to  contribute 
to  cooperative  ends.  The  general  underlying  assumption,  that 
it  will  do  so,  we  have  seen  to  be  false.  Equally  unjustified  have 
been  the  accounts  of  actual  industry  which  assume  the  general 

1  Adam  Smith,  by  opening  his  Wealth  of  Nations  with  a  dissertation  upon  the 
economy  of  division  of  labour,  without  explaining  that  this  economy  rests  upon  a 
prior  conception  of  cooperation,  unwittingly  assisted  to  set  English  Political  Econ- 
omy upon  a  wrong  foundation. 


252  WORK  AND  WEALTH 

prevalence  of  free  competition.  At  all  times  the  area  and  liberty 
of  effective  competition  between  business  and  business,  worker 
and  worker,  have  been  limited,  and  tend  in  recent  times  to 
closer  limitation. 

But  if  division  of  labour  and  competition,  apart  from  a  reali- 
sation of  their  cooperative  values,  are  dehumanising  and  anti- 
social, so  likewise  is  the  growing  anonymity  of  modern  business. 
'Compagnie  Anonyme'  is  the  significant  French  name  for  a 
Jointstock  Company  with  its  unknown  shareholders.  But  this 
depersonalising  process  is  everywhere  inseparable  from  the  mag- 
nitude and  intricacy  of  modern  businesses  and  modern  markets. 
The  capital  belonging  to  a  crowd  of  persons,  who  are  strangers 
to  one  another,  is  massed  into  an  effective  productive  aggregate, 
and  is  set  to  cooperate  with  masses  of  labour  power  whose  owners 
are  divorced  from  all  direct  contact,  either  with  the  owners  of 
the  tools  and  material,  or  with  the  purchasers  of  the  product. 
An  effective  comradeship  among  large  numbers  of  workers,  dis- 
tributed over  diverse  processes  and  often  severed  widely  in  their 
places  of  work,  is  also  difficult  to  maintain.  A  great  modern 
business  is  in  its  structure  less  effectively  human  than  was  the 
small  workshop  which  it  displaced.  One  effect  of  this  weaker 
humanity  of  the  business,  especially  in  the  relations  between 
capital  and  labour,  employer  and  employee,  has  been  to  shift 
the  sentimental  attachment  of  the  worker  from  his  business  to 
his  trade-union.  He  is  less  a  member  of  a  business  firm,  serving 
some  directly  productive  function,  than  a  member  of  a  labour- 
group  extending  over  the  area  of  a  local  or  even  a  national 
trade. 

§  3.  This  consideration  brings  to  the  front  the  antagonism  be- 
tween capital  and  labour  which  has  in  modern  times  assumed  ever 
graver  dimensions  and  clearer  consciousness.  In  considering 
the  industrial  system  as  an  effective  economic  harmony  it  is  not 
easy  to  determine  whether  the  cooperative  or  the  competitive 
forces  are  gaining  ground.  On  the  one  hand,  the  competition 
between  businesses  in  the  same  trade  is  in  all  great  staple  trades 
giving  place  to  combinations,  which  not  only  unite  the  formerly 
conflicting  businesses,  but  weld  into  close  unity  the  capital  of 
various  related  trades.  Trusts,  cartels,  pools,  conferences  and 


THE  RECONSTRUCTION  OF  INDUSTRY  253 

various  experiments  in  federal  compacts,  for  regulating  output 
and  selling  prices,  are  everywhere  engaged  in  substituting  in- 
dustrial peace  for  war.  Direct  and  conscious  harmony  thus 
grows  among  formerly  antagonistic  capitalists  and  employers. 
The  organisation  of  labour  in  the  several  trades,  on  the  basis  of 
a  standard  wage  upheld  by  collective  bargaining,  marks  a  similar 
though  less  close  harmony  on  the  side  of  labour. 

But  these  advances  towards  conscious  harmony  among  hitherto 
competing  capitalists  and  labourers  have  been  attended  by  a 
widening  and  intensification  of  the  conscious  antagonism  between 
capital  and  labour  within  the  several  trades.  Indeed,  there  are 
signs  of  a  growing  extension  of  combination  for  definitely  hostile 
purposes,  a  ranging  of  capital  on  the  one  side,  labour  on  the 
other,  animated  by  a  broad  class  consciousness  which  is  new  in 
the  history  of  industry. 

In  fact,  it  has  all  along  been  inevitable  that  the  combinatory 
forces,  which  appeared  to  make  for  social  solidarity  in  industry, 
should  be  brought  up  at  what  appears  to  be  an  impenetrable 
barrier,  the  class  hostility  between  the  owners  of  instruments 
of  production  and  the  workers.  For  this  hostility  is  inherent  in 
the  distribution  which  evokes  an  Unproductive  Surplus.  So 
long  as  economic  advantages  permit  some  groups  of  capitalists, 
landowners  and  owners  of  organising  power,  to  take  for  themselves 
large  masses  of  unearned  income,  which  might  have  gone  to 
improve  the  conditions  of  the  workers,  had  they  been  able  to 
divert  it  into  wages,  no  false  platitudes  about  the  harmony  of 
capital  and  labour  will  secure  industrial  peace. 

For  that  harmony,  as  we  have  seen,  only  extends  to  the  por- 
tion of  the  product  distributed  as  costs.  Now,  the  enormously 
increased  productivity  of  modern  industry  has  resulted  in  an 
increase  of  the  size  and  relative  importance  of  the  surplus,  and 
the  large  proportion  of  that  surplus  which  is  distributed  un- 
productively  in  'unearned'  income  represents  a  growing  element 
of  discord. 

This  real  divergence  of  economic  interests  between  capital 
and  labour  is  not  then  to  be  bridged  by  an  economy  of  costs 
based  upon  the  fact  that,  since  each  factor  needs  the  other,  it  is 
interested  hi  its  proper  remuneration.  The  complaints  of  the  ex- 


254  WORK  AND  WEALTH 

isting  system  made  by  the  workers  not  merely  testify  to  a  growing 
realisation  of  their  economic  weakness  and  a  growing  sensitive- 
ness to  the  inequitable  modes  of  distribution.  They  are  founded 
on  the  belief  that  upon  the  whole  distribution  is  becoming  more 
inequitable  and  more  wasteful.  For  though  the  absolute  share 
of  the  workers  and  the  standard  of  real  wages  have  been  rising 
in  most  countries,1  that  rise  has  not  been  commensurate  with 
the  aggregate  increase  of  wealth.  In  other  words,  a  larger  pro- 
portion of  the  total  is  passing  into  unproductive  surplus,  the 
factor  of  discord,  a  smaller  into  costs,  the  factor  of  harmony. 
If  this  is  true,  it  implies  inevitably  a  worsening  of  the  relations 
between  capital  and  labour.  For,  so  long  as  the  owners  of  strong 
or  scarce  factors  of  production  are  rewarded  according  to  their 
strength  or  scarcity,  no  peace  is  possible.  The  absorption  of  the 
unassimilated  mass  of  wealth  in  a  higher  standard  of  life  for  the 
workers  and  an  enlargement  and  improvement  of  the  public 
services  is  essential  to  secure  the  substance  and  the  sense  of 
social  harmony  in  industry. 

§  4.  Leaving  out  for  the  moment  the  claim  of  the  State  for 
public  services,  this  socially  sound  distribution  of  the  product 
could  only  be  achieved  by  a  recasting  of  the  governmental  struc- 
ture of  the  Business,  the  Trade  and  Industry.  Towards  this 
governmental  reform  many  different  experiments  are  afoot. 
Various  modifications  of  the  ordinary  wage-system,  by  way  of 
bonuses  upon  individual  and  departmental  efficiency  of  labour, 
are  tried.  More  direct  attempts  to  harmonise  the  interests  of 
capital  and  labour  within  the  business  take  shape  in  schemes  of 
profit-sharing,  which  are  sometimes  carried  further  into  the 
closer  form  of  co-partnership,  by  which  the  workers  own  a  share 
of  the  capital  and,  by  virtue  of  this  ownership  may  be  admitted 
to  a  share  of  the  administration. 

Regarded  as  methods  of  harmonising  capital  and  labour  in  the 
business  structure,  most  of  these  schemes  appear  to  be  of  dubious 
worth,  when  we  apply  the  proper  test,  viz,  the  ability  to  divert 

1  Even  this  measure  of  working-class  progress  has  been  checked  during  the  last 
decade.  Recent  statistics  show  that  in  Great  Britain  and  in  most  other  Western 
civilised  countries,  the  rise  of  prices  since  1896  and  still  more  since  1905  has  not  been 
attended  by  a  corresponding  rise  of  wages,  though  profits  and  rate  of  interest  have 
risen  at  least  equally  with  prices. 


THE  RECONSTRUCTION  OF  INDUSTRY  255 

into  wages  a  portion  of  the  unproductive  surplus.  For,  though 
the  stimulus  of  a  'bonus'  or  a  so-called  ]  share  of  profit  may  in- 
crease the  absolute  wage  of  the  workers  in  the  business,  if  at  the 
same  time  it  proportionately  increases  the  dividend  or  profit,  it 
does  nothing  to  reduce  either  the  aggregate  or  the  proportion 
of  unproductive  surplus.  Moreover,  if  the  increased  produc- 
tivity of  labour  under  such  a  stimulus  is  attended  by  enhanced 
intensification  of  effort  in  muscle  or  in  nerve,  with  accompany- 
ing exhaustion,  the  total  utility  of  the  process  to  the  worker  may 
be  a  negative  quantity,  when  the  increased  human  cost  of  pro- 
duction has  been  set  against  the  utility  of  the  higher  income,  less 
advantageously  consumed  by  reason  of  the  exhaustion.  Again, 
though  many  of  these  schemes  expressly  induce  the  workers  to 
become  small  shareholders  in  the  business,  by  applying  the 
'bonus'  or  'profit'  to  the  purchase  of  shares,  nowhere  has  this 
ownership  by  the  workers  been  permitted  to  go  so  far  as  to  give 
them  any  determinant  voice  in  the  administration  of  the  business. 
Finally,  many  of  these  schemes  by  express  intention,  nearly  all 
of  them  in  actual  tendency,  weaken  the  attachment  of  the  work- 

1  The  ordinary  profit-sharing  scheme  is  vitiated,  alike  in  theory  and  in  practice, 
by  the  erroneous  attribution  of  the  concept  'profit '  to  that  which  is  'shared.'  This 
is  recognised  at  once  when  the  experiment  is  properly  described.  For  the  ordinary 
profit-sharing  scheme  begins  by  laying  down  a  normal  rate  of  wages  and  of  profits, 
based  upon  current  facts  of  commerce.  The  provision  for  this  standard  wage  and 
standard  profit  constitutes  a  first  charge  upon  the  takings  of  the  business.  Under 
normal  conditions  this  would  absorb  the  whole.  But  the  workers  are  now  told  that, 
if  they  produce  an  additional  income,  they  shall  have  in  extra  wages  half  of  it.  Now 
the  whole  of  this  additional  income  is  due  to  the  increased  efficiency  of  labour  under 
the  new  stimulus.  For  if  any  more  capital  than  before  is  required,  provision  for 
its  payment  at  the  normal  rate  is  made  before  account  is  taken  of  the  so-called 
profit  that  is  shared.  No  more  ability  or  effort  of  superintendence  is  required;  in 
fact  it  is  usually  contended  that  the  greater  care  taken  by  the  workers  renders  less 
supervision  necessary.  Thus  'profit'  is  a  misnomer  for  what  is  'shared.'  For  this 
so-called  'profit'  is  entirely  produced  by  greater  intensity,  skill  or  care  on  the  part 
of  labour.  The  fact  that  labour  gets  only  half,  and  that  only  after  the  whole  of  what 
should  be  called  the  deferred  'wage-fund'  has  served  to  meet  any  deficiency  in  the 
sum  required  to  pay  the  normal  dividends,  explains  why  most  of  these  schemes  fail 
after  a  short  trial.  The  proportion  of  the  extra-product  (evoked  entirely  by  the 
increased  stimulus  applied  to  labour),  that  is  actually  paid  to  labour,  is  too  small 
to  maintain  the  efficiency  of  the  stimulus.  When  these  profit-sharing  schemes  suc- 
ceed, the  success  is  nearly  always  traceable  to  the  fact  that  in  the  original  agreement, 
the  benevolent  employer  has  fixed  his  rate  of  interest  or  salary,  or  both,  upon  a 
lower  scale  than  is  current  in  the  trade,  so  that  the  stimulus  to  labour  is 
effective. 


256  WORK  AND  WEALTH 

ers  in  these  businesses  to  their  fellow-workers  in  other  businesses 
belonging  to  the  trade.  So,  whatever  power  proceeds  from  col- 
lective bargaining,  for  raising  wages  and  improving  the  other 
conditions  of  employment,  is  diminished  by  these  attempts  to 
harmonise  the  capital  and  labour  within  the  area  of  the  single 
business. 

It  is  significant  that  nearly  all  the  businesses  where  co-partner- 
ship shows  signs  of  enduring  success  are  legal  monopolies,  or 
are  otherwise  protected  from  free  competition,  so  that  the  prices 
for  the  commodities  or  services  they  sell  contain  a  considerable 
element  of  surplus.  A  fraction  of  this  surplus  is  diverted  from 
unproductive  into  productive  purposes  by  a  subsidy  to  wages. 
In  the  case  of  gas-works,  the  most  conspicuous  example,  this 
process  is  furthered  by  the  fact  that  legal  restrictions  upon 
dividends  make  what  at  first  sight  appears  a  policy  of  generosity 
to  labour,  costless  to  capital. 

§  5.  This  criticism  of  the  defects  of  these  private  experiments 
in  industrial  peace  is  reinforced  by  the  experience  of  cooperative 
movements.  Of  the  completely  self-governing  workshop  or 
other  business  in  which  the  whole  body  of  the  workers  are  sole 
owners  of  the  whole  capital  they  employ,  there  have  been  too  few 
examples  to  enable  any  conclusion  to  be  drawn.  But  nearly  all 
the  cases  where  the  actual  full  administration  of  a  business  has 
been  in  the  hands  of  those  employed  have  been  signal  failures, 
save  in  rare  instances  where  the  possession  of  some  skill  or 
situation  endowed  with  a  scarcity  value  has  assisted  them. 
Experiments  in  the  self-governing  workshop  make  it  evident 
that  direct  government  by  the  workers  in  their  capacity  of  pro- 
ducers is  technically  worse  than  government  by  the  owners  of  the 
capital.  The  selection  and  the  remuneration  of  ability  of  manage- 
ment are  always  found  defective,  and  the  employees  are  often 
unwilling  to  submit  to  proper  discipline,  even  when  they  have 
elected  the  persons  who  shall  exercise  it.  A  few  successful 
experiments  conducted  in  favourable  circumstances,  i.  e.,  where 
a  special  market  is  available,  or  where  only  a  section  of  the 
employees  wield  the  power  of  administration,  afford  no  con- 
siderable grounds  of  hope  for  this  mode  of  cooperative  settle- 
ment. 


THE  RECONSTRUCTION  OF  INDUSTRY  257 

Thus  there  seems  no  ground  for  holding  that  any  really  satis- 
factory settlement  of  the  conflicts  between  capital  and  labour 
can  be  got  by  private  arrangements  of  a  profit-sharing  or  a 
cooperative  character. 

PART  II 

PRODUCER  AND   CONSUMER 

§6.  Before  considering  more  definitely  '  socialistic '  remedies, 
it  is  best,  however,  to  open  out  the  other  conflict  of  interest, 
between  producer  and  consumer.  It  is,  of  course,  often  held, 
even  by  those  who  recognise  some  reality  in  the  opposition  be- 
tween capital  and  labour,  that  the  supposed  opposition  between 
producer  and  consumer  has  no  real  foundation. 

When  producers  compete,  the  gains  of  such  competition  in 
lower  prices,  better  quality,  etc.,  drop  into  the  consumer's  lap. 
Even  where  producers  combine,  or  a  single  business  holds  the 
market,  it  is  supposed  that  the  monopolist  will  generally  find  it 
most  profitable  to  furnish  a  sound  article  at  a  moderate  price. 

But  this  natural  harmony  between  producer  and  consumer 
is  subject  to  precisely  the  same  qualification  as  that  between 
capital  and  labour.  Producer  and  consumer  are  necessary  to 
one  another,  there  is  community  of  interests  up  to  a  limit.  But 
beyond  that  limit  there  is  an  equally  natural  conflict.  It  is  true 
that  where  producers  compete  freely  prices  are  cut  down  for  the 
consumer.  But  it  is  by  no  means  true  that  he  tends  to  get  the 
cheapest  goods  which  current  arts  of  production  render  possible. 
For  the  expenses  of  competition,  which  are  enormous,  are  de- 
frayed by  him  in  the  price  he  pays.  Nor  does  free  competition 
secure  quality  of  product.  It  stimulates  the  arts  of  adulteration 
and  deceit,  and  sets  the  cunning  of  the  skilled  producer  against 
the  simplicity  of  the  unskilled  purchaser.  While,  therefore,  it 
may  be  urged  that  where  competition  of  producers  is  effective, 
comparatively  little  'surplus'  passes  into  their  hands,  the  waste 
of  industrial  power  through  the  maintenance  of  excessive  ma- 
chinery of  production  and  of  distribution  is  a  grave  social  loss. 

Still  less  can  it  be  admitted,  that  where  combination  has  dis- 
placed competition,  the  consumer's  interests  are  safe.  On  the 


258  WORK  AND  WEALTH 

contrary,  it  is  recognised  by  all  economists  that  where  any 
effective  monopoly  is  established,  the  selling  prices  to  consumers 
will  always  be  such  as  to  secure  a  surplus  profit  to  the  producer. 
Prices  may  not  always  be  as  high  as,  or  higher  than,  they  would 
have  been  if  a  wasteful  competition  were  maintained,  but  they 
will  always  be  such  as  to  extract  a  higher  profit  than  is  needed 
for  the  remuneration  of  capital  and  ability.  Where  the  articles 
sold  are  necessaries  or  prime  conveniences  of  life,  and  do  not 
admit  of  effective  substitutes,  the  prices  will  be  indefinitely 
higher  than  under  competition,  and  the  conflict  between  pro- 
ducer and  consumer  more  acute.  Since  under  modern  capi- 
talism an  ever-increasing  number  of  'routine'  requirements, 
covering  the  chief  necessaries  of  large  populations,  are  passing 
under  some  form  or  other  of  effective  combination,  it  is  clear 
that  the  problem  of  industrial  peace  must  come  to  concern  it- 
self more  and  more  with  the  conflicts  of  producer  and  consumer. 
At  present  the  consumer,  at  any  rate  in  England,  largely  real- 
ises this  conflict  as  a  by-product  of  the  struggle  between  capital 
and  labour.  Though  the  strikes  and  lock-outs,  which  express 
that  struggle,  disastrously  affect  his  welfare,  he  is  told  that  they 
are  not  his  business,  and  he  has  no  right  to  interfere.  Where 
a  settlement  has  taken  place  between  capital  and  labour  on  a 
basis  of  higher  wages  or  shorter  hours,  he  finds  the  cost  of  this 
settlement  is  usually  passed  on  to  him  in  higher  rates  or  prices. 
As  joint-agreements  between  employers'  federations  and  trade 
unions  become  more  common  and  more  effective,  as  methods 
of  conciliation  and  arbitration  receive  legal  sanction  and  assist- 
ance, as  wage-boards  extend  to  new  fields  of  industry,  the  false- 
hood and  the  social  wrong  which  underlie  the  maxim  'caveat 
emptor*  become  more  manifest.  The  consumer  will  become  in- 
creasingly more  impotent  to  protect  himself  against  the  depre- 
dations of  organised  groups  of  producers.  Indeed,  experience 
proves  that  even  where  combinations  are  subject  to  the  sanction 
and  control  of  the  State,  which  theoretically  is  dedicated  to  the 
service  of  the  public  as  a  whole,  and  might  at  least  be  expected  to 
hold  the  balance  even  between  producer  and  consumer,  pro- 
ducers' interests  are  preferred.  In  the  present  policy  of  state 
control  of  Railways,  and  in  the  various  schemes  for  the  extension 


THE  RECONSTRUCTION  OF  INDUSTRY  259 

of  Wage  Board  legislation,  there  is  no  proper  recognition  of  the 
interests  of  the  consumer.  An  ill-devised  lopsided  Socialism  is 
springing  up,  the  likely  result  of  which  appears  to  be  to  set  up 
groups  of  selected  and  preferred  employments,  whose  higher 
wage-bill  will  in  reality  be  defrayed  not  out  of  rents,  surplus 
profits  or  any  other  unearned  income,  but  in  large  measure  out 
of  the  reduction  of  real  wages  which  arbitrary  rises  of  consumers ' 
prices  will  impose  upon  other  wage-earners.  A  flagrant  instance 
of  this  defective  social  policy  is  supplied  by  the  recent  arrange- 
ment by  which  the  railways  of  this  country  have  been  empowered 
by  Government  to  raise  the  wages  of  their  employees  by  reducing 
the  real  wages  of  the  general  body  of  the  wage-earners,  who  are 
called  upon  to  bear  a  large  part  of  the  cost  in  the  higher  prices  of 
commodities  which  follows  upon  the  rise  of  railway  rates. 

§  7.  Now,  admitting,  as  we  must,  that  a  real  divergence  of 
interests  between  producers  and  consumers  may  and  must  arise 
in  the  ordinary  course  of  industry,  what  remedy  is  possible? 

There  is  one  large  working-class  movement  which  seems  ex- 
pressly designed  for  the  protection  of  the  consuming  public.  I 
allude  of  course  to  the  great  Cooperative  Movement  on  the 
Rochdale  plan,  in  which  the  supreme  control  is  vested  in  the 
consumers  and  their  representatives.  How  far  does  this  scheme 
represent  a  true  reconcilement  of  producers'  and  consumers' 
interests?  A  very  little  investigation  will  show  that,  however 
excellent  the  other  services  it  renders  to  the  working-classes,  its 
conduct  of  business  affords  no  complete  harmony  of  the  interests 
of  the  several  factors. 

For  its  entire  structure  and  working  are  motived  by  the  in- 
tention to  absorb  in  real  wages  (by  means  of  dividends  on  pur- 
chases) the  'profits'  to  which  in  ordinary  trade  most  of  the  un- 
productive surplus  seems  to  adhere.  By  dispensing  with  the 
profits  of  various  grades  of  middlemen,  by  reducing  the  expenses 
of  management,  by  saving  most  of  the  costs  of  advertising  and 
other  incidental  costs  of  distribution,  much  surplus  is  diverted 
into  real  wages.  But,  regarding  this  scheme  from  the  stand- 
point which  immediately  concerns  us,  as  a  reconcilement  of 
capital  and  labour  within  the  business,  we  find  an  obvious  defect. 
There  is  nothing  in  the  theory,  or  commonly  in  the  practice,  oi 


260  WORK  AND  WEALTH 

the  cooperative  store  or  workshop,  to  evoke  from  the  employees 
any  special  interest  in  its  successful  conduct.  If  they  are  mem- 
bers, they  do  indeed  get  in  this  capacity  a  gain  equal  to  that  en- 
joyed by  other  members  not  employed  in  the  business.  But,  as 
employees,  they  have  no  voice  in  the  administration  and  no 
share  in  the  gains.  Where,  as  in  the  Scottish  Wholesale,  a  profit- 
sharing  scheme  is  attached,  this  scheme  is  exposed  to  the  same 
criticism  that  we  have  applied  to  other  profit-sharing  schemes. 
There  is  no  security  afforded  by  this  cooperative  form  of  busi- 
ness for  the  full  reconcilement  of  the  claims  of  capital  and  labour 
within  the  business.  But,  after  all,  it  might  be  objected,  that 
does  not  really  matter.  For,  if  the  worker  in  a  cooperative  mill 
or  store  is  also  a  cooperative  consumer,  he  will,  as  such,  enjoy 
a  collective  gain  as  great  as  he  could  hope  to  gain  if  he  were 
assigned  a  special  lien  upon  the  surplus  that  emerged  from  the 
successful  conduct  of  the  particular  business  in  which  he  worked. 
It  will  be  his  intelligent  interest,  as  consumer,  to  help  to  elect 
and  to  maintain  an  effective  administration  in  all  the  various 
productive  and  distributive  businesses  from  which  are  derived 
the  half-yearly  dividend  on  purchases  which  he  receives. 

Now  if  the  working-classes  of  the  nation  made  all  their  pur- 
chases through  cooperative  stores,  and  if  these  stores,  in  their 
turn,  bought  what  they  sell  exclusively  from  cooperative  pro- 
ductive businesses,  and  if  all  working-class  consumers  were  em- 
ployed in  these  cooperative  businesses,  a  solution  of  the  social 
problem  on  cooperative  lines  might  be  plausible.  For  any  surplus 
made  at  any  stage  would  flow  in  the  ordinary  course  of  events 
into  consumers '  dividends,  forming  an  addition  to  the  real  wages 
which  they  earned  as  producers.  Nor  need  it  matter  that  the 
cooperative  consumers  were  not  full  owners  of  all  the  capital 
they  needed  to  employ,  provided  they  could  borrow  it  in  a  free 
market.  If  the  agricultural  and  mining  lands,  whose  produce 
they  required,  did  not  belong  to  them,  there  would  indeed  remain 
a  large  leakage  in  the  shape  of  economic  rent.  But  the  nature 
of  the  so-called  land  monopoly  is  not  such  as  to  prevent  the 
cooperative  consumers  from  taking  in  real  wages  the  great  bulk 
of  the  surplus  which  otherwise  would  have  gone  to  capitalists 
and  entrepreneurs  in  unearned  income. 


THE  RECONSTRUCTION  OF  INDUSTRY  261 

Unfortunately,  large  and  important  as  is  this  Cooperative 
Movement,  it  falls  far  short  of  the  full  conditions  here  laid  down. 
The  majority  of  the  wage-earners  are  not  members  of  Coopera- 
tive Stores:  those  who  are  members  only  purchase  certain  sorts 
of  goods  at  the  store:  owing  to  the  slighter  development  of 
productive  cooperation,  a  large  proportion  of  the  goods  sold  in 
the  stores  are  bought  in  the  ordinary  markets:  comparatively 
few  of  the  cooperative  consumers  are  employed  in  coopera- 
tive businesses.  There  are  large  tracts  of  industry,  such  as 
agriculture,  mining,  transport,  building,1  metal-working  and 
machine-making,  which  the  Cooperative  Movement  has  hardly 
touched,  nor  are  there  signs  of  any  rapid  extension  in  these 
fields  of  enterprise.  In  point  of  fact,  cooperation  has  almost 
entirely  confined  itself  to  trades  and  industries  where  com- 
petition is  normally  free,  and  where  the  object  of  cooperation 
has  rather  been  to  save  and  secure  as  'divi'  certain  ordinary 
expenses  of  competitive  businesses  than  to  invade  the  strong- 
holds of  highly  profitable  capitalism  where  unearned  surpluses 
are  large.  While,  then,  a  considerable  proportion  of  the  total 
working-class  income  is  expended  upon  articles  bought  in  the 
stores  2  and  valuable  economies  are  affected,  only  a  small  pro- 
portion of  the  eleven  millions  paid  in  dividends  and  interest  to 
consumers  can  be  taken  to  represent  unproductive  surplus 
absorbed  into  wages.  While,  therefore,  the  advance  of  the 
Cooperative  Movement  in  recent  years,  alike  in  membership, 
in  volume  of  trade  and  in  profits,  has  been  rapid,  a  careful 
examination  of  the  field  of  cooperative  progress  does  not  indicate 
any  solution  of  the  main  problem  of  distribution  along  these 
lines.  The  areas  of  really  profitable  private  enterprise  are  to  all 
appearance  unassailable  by  the  Cooperative  Movement. 

§  8.  But  we  find  within  the  Cooperative  Movement  some 
experiences  which  shed  light  upon  the  problem  of  business  ad- 
ministration. If  the  truly  social  nature  of  the  '  business '  is  to  be 
expressed  in  its  government,  the  Rochdale  plan,  upon  which  the 

1  Building  Societies  are  only  in  a  very  restricted  sense  cooperative. 

J  In  1909  the  aggregate  sales  at  the  Retail  Stores  amounted  to  £70,  423,359,  or 
about  10%  of  the  working-class  income,  and  the  profit  (including  interest  paid  on 
shares)  was  £10,851,739. 


262  WORK  AND  WEALTH 

main  cooperative  structure  has  been  erected,  contributes  an 
element  of  really  vital  importance.  It  asserts  that  a  business 
exists,  not  to  furnish  profit  to  the  capitalist  employer  or  wages 
to  the  workers,  but  commodities  to  consumers.  The  consumer, 
being  the  end  and  furnishing  by  his  purchase-power  the  stimulus, 
should  hold  the  reins  of  government.  He  is  the  owner,  he  shall 
rule,  he  shall  receive  the  whole  gain.  This  is  a  complete  reversal 
of  the  ordinary  idea  of  the  business  world,  to  which  a  business 
exists  to  secure  profits  to  business  men,  the  worker  and  the 
market  (consumer)  being  mere  instruments  in  profit-making. 
Hardly  less  does  it  counterwork  the  ordinary  ideas  and  feelings 
of  the  working-man,  for  whom  the  business  exists  merely  as  a 
means  of  remunerative  employment,  and  whose  sole  idea  of  re- 
form is  to  secure  in  higher  wages  and  improved  conditions  of 
labour  as  much  of  the  profits  as  possible.  To  neither  does  it 
for  one  moment  seem  reasonable  that  the  consumer  should 
interfere  in  the  administration  of  the  business,  or  take  any  share 
in  its  gains,  save  such  as  must  come  to  him  in  the  ordinary  course 
of  trade. 

Thus  the  success  of  the  Rochdale  plan  is  a  dramatic  assertion 
of  a  revolutionary  idea  in  the  organisation  of  business.  It  is 
proved  that  large  numbers  of  routine  businesses  can  be  conducted 
by  and  for  consumers.  But  it  cannot  be  assumed  that  this  con- 
centration of  the  meaning,  the  utility  and  the  government  of 
industry  in  the  consumer,  has  complete  validity.  It  may  be 
called  consumers'  socialism,  as  distinguished  from  the  sort  of 
producers'  socialism  which  prevails  among  trade  unionists. 
As  the  latter  aims  at  controlling  businesses  in  order  to  divert 
directly  into  wages  all  surplus  profit,  so  the  former  aims  at  con- 
trolling businesses  in  order  to  divert  the  same  fund  into  con- 
sumers' dividends.  Now,  if  the  producers  and  the  consumers 
of  the  goods  produced  in  any  business  were  the  same,  it  might 
seem  a  matter  of  indifference  in  which  capacity  they  took  the 
gain.  But  they  are  not.  The  workers  in  a  particular  mill  or 
store  buy  for  their  own  use  a  very  minute  fraction  of  the  goods 
there  produced.  Even  if  the  workers,  by  means  of  their  unions 
or  their  cooperative  societies,  could  capture  the  whole  industrial 
machinery,  it  would  still  remain  a  matter  of  importance  how  far 


THE  RECONSTRUCTION  OF  INDUSTRY  263 

they  paid  themselves  in  higher  wages,  how  far  in  consumers' 
dividends.  For  unless  their  claims  as  producers  and  as  con- 
sumers were  properly  adjusted  in  the  control  of  the  several 
businesses,  there  would  be  little  or  nothing  to  distribute. 

Few  thoughtful  cooperators  will  claim  finality  and  all-suffi- 
ciency for  the  cooperative  idea  as  embodied  in  the  present 
movement. 

The  persistent  struggles  in  the  movement  itself  to  temper  the 
absolutism  of  the  consumer  by  the  assertion  of  cooperative  em- 
ployees to  a  higher  rate  of  pay  than  obtains  in  the  outside  labour 
market  and  to  a  share  of  the  profits,  is  an  interesting  commentary 
on  the  problem  of  social  administration  of  the  business.  It  is 
widely  felt  that  the  view  that  a  business  exists  in  order  to  supply 
utilities  to  consumers  is  defective  as  a  principle  of  business  govern- 
ment. The  claim  of  the  owners  of  the  factors  of  production  em- 
ployed in  the  business  to  some  voice  in  the  conduct  of  that 
business  is  not  lightly  to  be  set  aside  by  asserting  that  the  factors 
of  production  are  mere  means  to  the  consumer's  end.  If  the 
consumers  themselves  own  the  share-capital  or  borrow  other 
capital  at  market  rates  with  good  security,  the  issue  of  the  con- 
trol of  capital  need  not  arise.  But  the  labour  employed  in  a  co- 
operative business  has  a  human  interest  in  the  conduct  of  the 
business  separate  from  that  of  the  consumers.  In  virtue  of  this 
human  interest,  these  workers  impugn  the  doctrine  that  the  busi- 
ness exists  solely  for  the  consumers,  and  insist  that  their  human 
interest  shall  be  adequately  represented  in  the  conduct  of  the 
business  and  the  distribution  of  its  gains. 

§  9.  Those  who  have  followed  and  accept  the  general  princi- 
ples of  our  analysis  of  industry  into  human  costs  of  produc- 
tion and  human  utilities  of  consumption  will  be  disposed  a 
priori  to  accept  the  view  that,  in  the  equitable  control  of  every 
business,  the  interests  of  the  worker  as  well  as  of  the  consumers 
should  be  represented.  Regarded  from  the  social  standpoint,  it 
is  as  important  that  good  conditions  of  employment  shall  prevail 
in  a  business,  as  that  good  articles  shall  be  furnished  cheaply 
to  consumers.  Nor,  as  we  recognise,  can  we  assume  that  an 
enlightened  business  government  by  consumers,  any  more  than 
by  capitalists,  will  necessarily  secure  these  good  conditions  for 


264  WORK  AND  WEALTH 

employees.  Definite  and  not  inconsiderable  instances  of  sweating 
inside  the  cooperative  movement  itself  testify  to  the  reality  of 
this  need.  But  it  is  urged  not  merely  on  grounds  of  equity,  as  a 
protection  against  possible  abuses  of  power  by  consumers  or 
their  representatives,  but  on  grounds  of  sound  economy.  For 
if  it  be  admitted  that  the  employees  in  a  cooperative  business 
have  a  special  human  interest,  it  is  idle  to  argue  that  it  is  socially 
advantageous  to  leave  this  interest  without  representation  in 
the  conduct  of  the  business. 

The  cooperation  which  assigns  all  power  and  all  gain  to  the 
consumer  is  in  fact  vitiated  by  the  same  social  fallacy  as  the 
syndicalism  which  would  assign  the  same  monopoly  to  the  em- 
ployee, or  as  the  capitalism  which  does  assign  it  to  the  profit- 
monger.  Equity  and  economy  alike  demand  that  the  interests 
of  all  three  shall  be  adequately  represented.  Social  remuneration 
in  its  application  to  the  business  unit  must  proceed  upon  this 
fundamental  principle.  A  business  consists  of  capital,  labour, 
and  the  market.  To  place  unlimited  control  in  the  hands  of  any 
of  those  factors  is  wasteful  and  dangerous.  The  human  defects 
of  uncontrolled  capitalism  have  been  made  sufficiently  apparent. 
Any  adequate  experiment  in  uncontrolled  trade-unionism  or  in 
syndicalism  would  disclose  similar  abuses.  The  idea  of  the 
miners  running  the  mine,  or  the  factory-hands  the  factory,  the 
railway  workers  the  railway,  is  not  so  much  unsound  in  the 
sense  that  they  must  fail  to  run  it  properly.  For  though  unlikely, 
it  is  at  least  conceivable  that  they  might  have  enough  intelli- 
gence and  character  to  buy  competent  managers  and  carry  out 
their  detailed  instructions.  Its  fundamental  vice  consists  in 
ignoring  the  factor  of  the  market,  and  in  building  up  a  number  of 
separate  industrial  structures  in  which  the  consumers'  interests 
are  unrepresented.  It  may  appear  plausible  to  argue  that  the 
control  of  each  process  of  production  should  be  left  to  the  pro- 
ducers who  may  be  presumed  to  know  it  best.  But  it  becomes 
evident,  even  to  the  syndicalist,  that  no  business  could  be  con- 
ducted upon  this  policy  unmodified.  No  housebuilding  could 
proceed,  if  the  plasterers,  the  bricklayers,  the  carpenters,  had 
each  full  power  to  determine  when  they  would  work,  at  what 
pace  they  would  work,  and  what  remuneration  they  should  exact. 


THE  RECONSTRUCTION  OF  INDUSTRY  265 

There  must  be  a  definite  arrangement  between  the  groups  of 
workers  in  the  several  processes  within  each  business,  which  will 
qualify  the  control  of  plastering  by  the  plasterers,  bricklaying 
by  the  bricklayers,  by  a  wider  control  that  represents  the  common 
interests  of  the  business.  Not  merely  does  the  syndicalist  idea 
recognise  this  cooperation  of  the  processes  within  a  business, 
but  it  extends  the  cooperative  character  of  the  control  to  the 
trade  as  a  whole.  Under  syndicalism  the  building  trade  would 
not  be  broken  into  a  number  of  businesses  in  each  of  which 
would  be  made  a  separate  arrangement  between  the  carpenters, 
bricklayers,  etc.,  employed  in  it.  The  arrangements  as  to  hours 
and  pace  and  remuneration,  etc.,  would  be  determined  by  rep- 
resentatives of  the  various  crafts  on  a  trade  basis,  and  would  be 
the  same  for  all  businesses  and  all  jobs.  But  the  organisation  of 
producers  could  not  stop  there.  Each  trade  could  no  more  be 
entirely  self-governing  than  each  business  or  each  process  in  a 
business.  The  trade-organisation  of  the  miners  could  not,  hav- 
ing regard  to  the  interests  and  needs  of  other  trades,  be  safely 
entrusted  with  the  absolute  control  of  mining,  or  the  railway 
workers  with  the  absolute  control  of  the  railways.  There  must 
be  some  power  to  prevent  the  miners  reducing  their  amount  of 
work  and  their  output  to  an  extent  which  will  cripple  the  other 
trades  which  need  coal,  and  to  compel  the  railway  workers  to 
afford  reasonable  facilities  of  transport  on  reasonable  terms  to 
shippers  and  travellers.  For,  otherwise,  there  would  be  substi- 
tuted for  the  conflict  of  capital  and  labour  within  each  business 
or  each  trade,  a  conflict  of  trades,  each  striving  to  do  as  little 
and  to  get  as  much  as  possible  out  of  the  aggregate  wealth.  Nor 
can  it  be  assumed  that  the  intelligent  self-interest  or  social 
sympathy  of  the  miners,  or  railwaymen,  or  other  trades,  would 
be  adequate  safeguards  against  such  abuses.  This  is  evident 
when  we  bear  in  mind  the  central  concrete  problem  before  us, 
the  social  distribution  and  utilisation  of  the  surplus.  For  it  will 
be  technically  possible  for  any  strongly-placed  special  group  of 
workers,  such  as  the  miners  or  railway  workers,  to  take  to  them- 
selves, in  remuneration  or  in  leisure,  an  excessive  proportion  of 
this  surplus,  leaving  very  little  for  any  other  group  of  workers. 
The  guild-feeling,  upon  which  syndicalism  mainly  relies,  not 


266  WORK  AND  WEALTH 

merely  supplies  no  safeguard  against  this  abuse  of  power,  but 
would  almost  certainly  evoke  it,  unless  a  potent  control,  rep- 
resenting industry  in  general,  were  established  over  the  indi- 
vidual trades  or  guilds.  Experience  of  cases  where  local  trade- 
unions  are  occasionally  placed  in  a  position  of  tyranny  shows 
that  they  will  play  for  their  own  hand  with  a  disregard  to  the 
interests  of  their  fellow-workers  in  other  trades  as  callous  as  is 
displayed  by  any  trust  of  capitalists.  Assuming,  then,  that  it 
were  possible  for  guild-societies  to  develop  to  the  point  that  the 
workers  in  each  trade  were  in  possession  of  all  the  instruments 
of  production,  and  were  able  to  conduct  the  processes  efficiently, 
the  problem  of  distributing  the  'surplus'  among  the  several 
trades  or  guilds,  in  the  shape  of  pay  or  leisure,  would  still  re- 
main unsolved.  Among  the  groups  of  producers,  in  a  word,  there 
would  remain  divergencies  of  interest,  which  would  be  incapable, 
upon  a  producers'  policy,  of  solution.  Syndicalists,  confronted 
with  this  phase  of  their  problem,  plunge  into  vague  assurances 
that  the  process  of  agreement  which  had  taken  place  between  the 
workers  in  the  several  processes  and  the  several  businesses  in  a 
trade,  could  be  extended  to  the  workers  grouped  in  the  larger 
trade-units,  and  that  the  real  solidarity  of  working-class  interests 
would  somehow  instinctively  express  itself  in  equitable  and 
durable  arrangements.  But  the  moment  one  passes  from  the 
region  of  phrases  to  that  of  concrete  facts  the  difficulties  thicken. 
An  elected  council  of  national  workers  would  have  to  devise 
some  practicable  method  of  comparing  units  of  railway  service 
with  units  of  mining,  bricklaying,  doctoring,  acting,  waiting,  etc., 
so  as  to  apply  to  each  productive  process  the  support  and  stimu- 
lus needed  to  induce  the  workers  engaged  in  it  to  do  their  share 
of  work  and  to  receive  their  share  of  wealth.  No  mere  time 
basis  for  such  competition  would  be  practicable.  It  would  be 
necessary  to  induce  a  body  of  labour  and  capital  to  apply  itself 
to  each  process  of  each  occupation,  sufficient  in  quantity  and  in 
efficiency  to  supply  the  requirements  of  the  working  community 
as  a  whole,  and  to  devise  a  mode  of  remuneration,  or  distribution 
of  products,  which  would  satisfy  this  requirement. 

It  is  quite  evident  that  all  this  adjustment  of  the  claims  and 
needs  of  individuals  within  a  process  in  a  business,  of  businesses 


THE  RECONSTRUCTION  OF  INDUSTRY  267 

in  a  trade,  of  trades  in  industry,  would  need  an  elaborate  hierachy 
of  representative  government,  with  a  supreme  legislature  and 
executive,  whose  will  must  over-rule  the  will  of  the  national  or 
local  groups  within  the  several  trades,  as  to  the  quantity  and 
method  of  work  to  be  done  in  each  concrete  process,  and  as  to 
the  remuneration  of  each  sort  of  work.  In  other  words,  society, 
as  a  whole,  would  have  imposed  its  final  control  upon  each 
group  of  workers,  diminishing  to  that  extent  their  power  to  de- 
termine the  conditions  under  which  they  would  work,  and  their 
effective  separate  ownership  of  the  instruments  of  production. 
The  ideal  of  the  self-governing  mine,  or  factory,  or  railway, 
would  thus  be  over-ridden  by  the  superior  ideal  of  a  self-governing 
society.  But  that  self-government  by  society,  the  supreme  leg- 
islation of  industry,  could  not  perform  its  work  by  confining 
its  attention  to  the  various  productive  processes,  and  the  busi- 
nesses and  trades  in  which  they  were  conducted.  It  would  be 
compelled  to  study  the  wants  and  will  of  the  consumers,  or,  if  it 
be  preferred,  of  the  workers  in  their  capacity  of  consumers.  For, 
only  by  the  study  of  the  consumer,  or  the  market,  could  the  work 
of  adjusting  the  application  of  productive  power  at  the  different 
productive  points,  and  the  process  of  remuneration  by  which 
that  distribution  was  achieved,  possibly  be  accomplished.  Thus, 
although  the  whole  body  of  this  syndicalist  legislature  might 
have  been  elected  to  represent  the  interests  of  separate  groups 
of  producers,  or  trades,  it  would  be  compelled  to  give  equal  atten- 
tion to  the  wants  and  the  will  of  the  consuming  public.  But  it 
would  discover  that,  just  in  proportion  as  it  was  accurately 
representative  of  the  separate  interests  of  groups  of  producers, 
to  that  extent  was  it  disqualified  for  safeguarding  the  interests 
of  the  consuming  public,  which  in  each  concrete  problem  would 
be  liable  to  cut  across  the  interests  of  special  groups  of  producers. 
In  other  words,  it  would  be  impossible  properly  to  regulate  the 
railway  service  without  direct  regard  to  the  interests  of  the 
travelling  and  trading  public  as  a  whole,  to  regulate  the  mining 
industry  without  regard  to  the  local,  seasonal  and  other  needs 
of  coal  consumers.  But  these  consumers'  interests  could  not  be 
properly  considered  in  a  legislature  chosen  entirely  by  separate 
groups  of  producers,  with  the  object  of  promoting  the  special  in- 


268  WORK  AND  WEALTH 

terests  of  these  groups.  The  impossibility  of  syndicalism  thus 
turns  upon  ignoring  in  the  control  of  business  the  will  of  the  con- 
sumer. 

§  10.  Thus  we  are  compelled  to  recognise  that  in  a  sound 
social  organisation  of  the  industrial  system,  and  of  each  part  of 
it,  the  business,  the  trade,  (or  the  group  of  trades)  and  the  con- 
sumer or  market  must  be  introduced  as  integral  factors  of 
government.  We  cannot  content  ourselves  with  the  view  that 
a  producer,  or  any  composite  body  of  producers,  is  necessarily 
impelled  by  its  self-interest  to  safeguard  the  interests  of  the 
consumer.  Nor  can  the  consumer  safeguard  his  interests  ade- 
quately through  the  guidance  or  stimulus  he  brings  to  bear 
through  his  separate  individual  acts  of  demand.  He  is  incapable 
of  protecting  himself  properly,  even  when  producers  are  not 
combined  but  are  competing.  When  they  are  combined  he  is 
helpless.  The  cleavages  of  immediate  economic  interest  be- 
tween the  worker  and  the  consumer  are  so  numerous  that  no 
abstract  identity  of  interests  in  a  community  where  all  consumers 
were  also  workers,  all  parasites  being  excluded,  would  suffice  to 
secure  the  requisite  economy  and  harmony.  This  economy  and 
harmony  can  only  be  secured  by  giving  the  consumer  a  direct 
voice  in  the  government  of  industry. 

Syndicalism  is  in  large  measure  a  reaction  against  forms  of 
state  socialism  which  are  vitiated  by  a  defect  similar  to  that 
which  we  find  in  the  Rochdale  cooperative  plan.  So  far  as  the 
public  services  are  honestly  and  efficiently  administered  by 
public  officials,  the  public  which  these  officials  represent  is  pri- 
marily the  citizen  in  his  capacity  of  consumer.  The  municipal 
services  are  run,  either  to  give  him  cheap  transport  or  lighting 
of  sound  standard  quality,  or  else  to  enable  him  to  get  police, 
street-cleaning  or  some  other  service  which  he  could  not  other- 
wise have  got.  But  this  bureaucratic  socialism  is  apt  to  neglect 
or  to  ignore  the  interests  of  its  employees,  and  to  deny  them  any 
influence  in  determining  the  conditions  of  their  employment, 
other  than  that  which  they  can  bring  to  bear  as  citizen-consumers. 
Thus  are  found  cases  where  public  departments,  or  the  contrac- 
tors they  employ,  are  allowed  to  pay  wages  so  low  or  to  offer 
such  irregular  employment,  as  to  contribute  to  that  inefficiency 


THE  RECONSTRUCTION  OF  INDUSTRY  269 

and  destitution  for  which  the  same  public  is  subsequently  called 
upon  to  make  financial  and  administrative  provision.  This  is  an 
inevitable  defect  of  a  one-sided  or  consumers'  socialism.  Nor 
is  it  likely  to  be  remedied  by  any  general  perfunctory  recognition 
of  the  duty  of  the  public  employer  to  observe  standard  conditions. 
For  in  most  cases  public  employment  will,  by  virtue  of  its  mono- 
polistic character,  contain  features  that  have  no  precise  analogy 
in  the  outside  business  world,  so  that  some  separate  method  of 
determining  the  application  of  standard  conditions  is  necessary. 
Unless  that  method  admits  direct  representation  of  the  interests 
of  the  employees,  there  can  be  no  sufficient  security  that  these 
interests  shall  receive  proper  consideration.  This  is  not  a  demand 
that  the  employees  shall  'interfere'  with  the  public  management, 
or  'dictate'  the  terms  of  their  employment.  On  the  contrary, 
it  is  clear  that  the  official  managers  must,  in  the  ordinary  course 
of  business,  secure  the  execution  of  their  orders.  But,  consider- 
ing that  their  standpoint  must  always  be  biassed  towards  a 
special  interpretation  of  the  public  interest  in  the  sense  of  effi- 
ciency and  economy  of  a  particular  output,  this  narrower  public 
interest  must  be  checked  by  reference  to  a  wider  public  interest 
in  which  the  human  costs  of  production  shall  be  represented. 
An  accumulating  weight  of  recent  experience  in  various  countries 
makes  it  evident  that  state-socialism  must  fail  unless  adequate 
provision  is  made  for  safeguarding  the  interest  of  particular 
groups  of  public  employees.  This  safeguard  cannot,  of  course,  be 
given  by  any  mere  concession  of  the  right  of  combination  and 
of  collective  bargaining.  For  while  collective  bargaining  may 
enable  the  employees  to  secure  fair  terms  where  they  are  dealing 
with  competing  private  businesses,  it  cannot  where  the  sole 
employer  is  the  State  or  Municipality.  The  latter  is  technically 
able  to  impose  its  terms  upon  any  group  of  workers  who  are 
specialised  for  the  work  it  offers.  Recognition  of  the  Union,  and 
an  admission  by  the  management  of  the  right  of  union-officials 
to  consultation  and  discussion  of  conditions  of  employment,  do 
not  really  furnish  any  basis  of  settlement,  though  they  may  often 
ease  a  difficulty  and  remove  misunderstanding.  What  is  required 
is  a  statutory  right  of  appeal  to  a  public  authority,  outside  of  and 
independent  of  the  particular  department,  competent  to  take  that 


270  WORK  AND  WEALTH 

wider  view  of  public  interest  from  which  the  departmental  public 
official  is,  by  the  necessity  of  his  situation,  precluded.  That 
claim  of  the  public  employee  is  frequently  misunderstood.  It 
does  not  arise  from  any  real  or  pretended  opposition  of  interests 
between  the  public  and  a  group  of  its  employees,  and  a  claim  on 
the  part  of  the  latter  that  the  public  shall  make  some  concession 
or  sacrifice  to  their  particular  group  interest.  There  is  no  such 
real  opposition  of  interests.  The  valid  claim  for  an  appeal  from 
the  arbitrary  decisions  of  the  public  departmental  managers  is 
based  upon  the  fact  that  the  latter  are  disqualified  for  a  full  im- 
partial view  of  the  public  interest,  so  far  as  that  public  interest 
is  affected  by  the  conditions  of  employment  of  the  employees 
under  them.  The  fact  that  the  employees  are  often  likely  to 
make  unreasonable  demands  and  to  claim  in  wages,  hours  and 
other  conditions,  an  excessive  share  of  the  public  revenue,  does 
not  affect  the  validity  of  this  contention.  For  practical  conven- 
ience official  departmentalism  exists.  But  this  departmentalism 
involves  a  business  management  essentially  defective  from  the 
standpoint  of  public  welfare,  inasmuch  as  it  tends  to  depreciate 
or  overlook  the  interest  which  the  public  has  in  the  total  welfare 
of  that  section  of  the  public  which  is  in  its  direct  employment. 
§  ii.  Of  course,  in  treating  the  issue  of  a  public  business  as  if 
it  consisted  simply  in  reconciling  the  immediate  interests  of  the 
consuming  public  with  those  of  the  public  employees,  we  have 
intentionally  excluded  another  view  which  may  often  be  more 
important.  State  socialism  may  be  run  primarily  in  the  interests, 
neither  of  the  citizen-consumer  nor  of  the  employer,  but  of  the 
bureaucracy,  who  here  occupy  the  place  of  the  capitalist-managers 
under  private  enterprise.  The  official  may  be  held  to  be  naturally 
disposed  to  magnify  his  office  and  to  abuse  any  power  which  can 
be  made  to  subserve  his  personal  or  class  interests.  Practical 
permanency  of  tenure  of  his  office,  and  the  special  knowledge 
which  it  brings,  enable  him,  with  safety,  either  to  neglect  his 
public  duties,  or  to  encroach  upon  the  liberties  of  citizens,  accord- 
ing as  he  is  lethargic  or  self-assertive.  He  may  squander  the 
resources  of  the  public  upon  ill-considered  projects,  or  in  serving 
the  private  interests  of  his  friends.  Or,  he  may  practice  a  tyran- 
nical or  a  niggardly  policy  towards  his  employees,  not  through 


THE  RECONSTRUCTION  OF  INDUSTRY  271 

a  narrow  interpretation  of  public  economy,  but  from  sheer  care- 
lessness or  from  defective  sympathy.  These  charges  against 
officialism  are  too  familiar  to  need  expansion  here.  However 
carefully  the  public  service  is  recruited,  such  abuses  will  be  liable 
frequently  to  occur,  and  the  structure  of  Government  should  be 
such  as  to  supply  effective  checks  and  remedies. 


CHAPTER  XVH 

THE  NATION  AND   THE  WORLD 

§  i.  We  have  examined  the  chief  defects  in  the  structure  of  a 
business  and  a  trade,  regarded  in  the  light  of  instruments  of 
human  welfare,  and  we  have  considered  some  of  the  remedies, 
applied  sometimes  for  purposes  of  distinctively  industrial  econ- 
omy, sometimes  as  devices  of  social  therapeutics. 

There  remains,  however,  one  other  mode  of  economic  antag- 
onism deserving  of  consideration.  Until  modern  times  a  nation 
was  to  all  intents  and  purposes  not  only  a  political  but  an  eco- 
nomic area,  in  the  sense  that  almost  all  trade  and  other  economic 
relations  were  confined  within  the  national  limit.  The  small 
dimensions  of  foreign,  as  compared  with  domestic  trade,  and 
the  nature  of  that  trade,  confined  to  articles  not  produced  at 
home,  had  little  tendency  to  generate  a  feeling  of  international 
rivalry.  Foreign  trade  was  almost  wholly  complementary  and 
not  competitive.  With  the  modern  changes,  which  have  altered 
this  condition  and  made  nations  appear  to  be  hostile  competitors 
in  world  commerce,  we  are  all  familiar.  The  development  of 
capitalist  production  to  a  common  level  and  along  similar  lines 
in  a  number  of  Western  nations,  the  tendency  towards  an  in- 
crease of  output  of  manufactured  goods  at  a  price  exceeding  the 
demands  of  the  existing  markets,  the  consequent  invasion  of  the 
markets  of  each  industrial  country  by  the  goods  of  other  coun- 
tries, and  the  growing  competition  of  the  groups  of  traders  in 
each  nation  to  secure  and  develop  new  markets  in  the  back- 
ward countries,  with  the  assistance  of  the  physical  and  military 
forces  of  their  respective  governments,  have  imposed  upon  the 
popular  mind  a  powerful  impression  of  economic  opposition 
between  nations.  No  falser  and  more  disastrous  delusion  pre- 
vails in  our  time.  The  only  facts  which  seem  to  give  support  to 
it  are  the  Tariffs,  Commercial  Treaties  and  the  occasional  uses  of 
political  pressure  and  military  force  by  States  for  the  benefit  of 

272 


THE  NATION  AND  THE  WORLD  273 

financiers,  investors,  traders  or  settlers  belonging  to  their  na- 
tionality. This  intervention  of  Governments  for  the  supposed 
advantage  of  their  citizens  has  had  the  unfortunate  effect  of 
presenting  nations  in  the  wholly  false  position  of  rival  business 
firms.  Groups  of  private  manufacturers,  traders  and  financiers, 
using  their  government  to  secure  their  private  profitable  ends, 
have  thus  produced  grave  conflicts  of  international  policy.  The 
worst  instrument  of  this  antagonism,  because  the  most  obvious 
and  the  most  vexatious,  is  the  protective  Tariff,  and  the  most 
singular  proof  of  its  derationalising  efficacy  is  found  in  the  con- 
duct of  our  recent  fiscal  controversy.  The  fiercest  fight  in  all 
that  controversy  has  raged  round  the  relative  size,  growth  and 
profitable  character  of  the  foreign  trade  of  Great  Britain,  Ger- 
many, America,  etc.  These  States  are  actually  treated,  not 
merely  by  Protectionists  but  by  many  Free  Traders,  as  if  they 
were  great  trading  firms,  engaged  in  struggling  against  one 
another  for  the  exclusive  possession  of  some  limited  economic 
territory,  the  success  of  one  being  attended  by  a  loss  to  the 
others.  Now,  Great  Britain,  Germany  and  America  are  not 
economic  entities  at  all;  they  are  not  engaged  in  world  commerce, 
either  as  competitors  or  as  cooperators;  the  respective  advances 
or  declines  made  by  certain  groups  of  merchants  within  their 
confines  in  overseas  trade  have  no  net  national  significance  at  all. 
Finally,  overseas  trade,  by  itself,  furnishes  no  index  of  the  collect- 
ive prosperity  of  each  nation. 

§  2.  The  whole  presentation  of  the  case  under  the  head  of 
Nations  is  irrelevant  and  deceptive,  conveying,  as  it  is  designed 
to  do,  the  false  suggestion  that  Englishmen,  grouped  together 
as  a  people,  are  somehow  competing  with  Germans  grouped 
together  as  another  nation,  and  Americans  as  a  third  nation. 
Now  no  such  collective  competition  exists  at  all.  So  far  as  trade 
involves  competition,  that  competition  takes  place,  not  between 
nations,  but  between  trading  firms,  and  it  is  much  keener  and 
more  persistent  between  trading  firms  belonging  to  the  same 
nation  than  between  those  belonging  to  different  nations.  Bir- 
mingham or  Sheffield  firms  compete  with  one  another  for  machin- 
ery and  metal  contracts  far  more  fiercely  than  they  compete  with 
Germans  or  Americans  in  the  same  trade,  and  so  it  is  in  every 


274  WORK  AND  WEALTH 

other  industry.  The  production  of  import  and  export  figures, 
and  of  balances  of  trade,  under  national  headings,  is  a  mis- 
chievous pandering  to  the  most  dangerous  delusion  of  the  age. 
It  has  done  more  than  anything  else  to  hide  the  great  and  benef- 
icent truth,  that  the  harmony  and  solidarity  of  economic  in- 
terests among  mankind  have  at  last  definitely  transcended 
national  limits,  and  are  rapidly  binding  members  of  different 
nations  in  an  ever-growing  network  of  cooperation.  Within  the 
last  generation  a  more  solid  and  abiding  foundation  for  this 
cooperation  than  ordinary  exchange  of  goods  has  been  laid  in  the 
shape  of  international  finance.  Though  certain  dangerous 
abuses  have  attended  its  beginnings,  this  cooperation  of  the 
citizens  of  various  countries  in  business  enterprises  in  all  parts 
of  the  world  is  the  most  potent  of  forces  making  for  peace  and 
progress.  More  rapidly  than  is  commonly  conceived,  it  is  bring- 
ing into  existence  a  single  economic  world-state  with  an  order 
and  a  government  which  are  hardly  the  less  authoritative  be- 
cause, as  yet,  they  possess  a  slender  political  support.  That 
economic  world-state  consists  of  all  that  huge  area  of  indus- 
trially developed  countries  in  regular  and  steady  intercourse, 
linked  to  one  another  by  systems  of  railroads  and  steamship 
routes,  by  postal  and  telegraphic  services,  administered  by  com- 
mon arrangements,  by  regular  commerce,  common  markets  and 
reliable  modes  of  monetary  payment,  and  by  partnerships  of 
capital  and  labour  in  common  business  transactions. 

§  3.  The  actuality  of  this  world-system  has  preceded  its  con- 
scious realisation.  But  the  growing  fact  is  educating  the  idea 
and  the  accompanying  sentiment  in  the  minds  of  the  more  en- 
lightened members  of  all  civilised  nations.  We  hear  more  of 
internationalism  from  the  side  of  labour.  But,  in  point  of  fact, 
the  corporate  unity  of  labour  lags  far  behind  that  of  capital. 
For  the  mobility  of  capital  is  much  greater,  and  its  distribution 
is  far  better  organised.  But,  as  the  financial  machinery  for  the 
collection  and  distribution  of  industrial  power  over  the  whole 
economic  world  is  further  perfected  and  unified,  it  will  be  at- 
tended by  a  loosening  of  those  local  and  national  bonds  which 
have  hitherto  limited  the  free  movement  of  labour.  As  the 
centre  of  gravity  in  the  economic  system  shifts  from  land,  which 


THE  NATION  AND  THE  WORLD  275 

is  immovable,  to  money,  the  most  mobile  of  economic  factors, 
so  the  old  local  attachment  which  kept  most  labour  fastened  to 
some  small  plot  of  the  earth,  its  native  village,  will  yield  place  to 
liberty  of  movement  accommodated  to  the  needs  and  opportuni- 
ties of  modern  profitable  business.  Within  the  limits  of  each 
country  the  increased  mobility  has  long  been  evident:  it  has 
helped  to  break  up  parochialism  and  provincialism  of  ideas  and 
feelings,  and  to  evolve  a  stronger  sense  of  national  unity.  But 
there  is  to  be  no  halting  at  the  limits  of  the  nation.  Already 
large  forces  of  international  labour  exist.  Not  merely  do  vast 
numbers  of  workers  migrate  with  increased  ease  from  Belgium 
into  France,  from  Russia  into  the  United  States,  from  Germany 
into  South  America,  for  settlement  in  these  countries,  but  large 
bodies  of  wage-earners  are  being  organised  as  a  cosmopolitan 
labour  force  following  the  currents  of  industrial  development 
about  the  world.  So  far  as  unskilled  labour  is  concerned,  large 
tracts  of  China,  India  and  the  Straits  Settlements,  form  a  re- 
cruiting ground  in  Asia;  while  Italy  and  Austro-Hungary  furnish 
a  large  European  contingent.  But  not  less  significant  are  the 
higher  ranks  of  cosmopolitan  labour,  the  British  and  American 
managers,  overseers  and  workmen  in  the  engineering,  railroad, 
electrical  and  mining  industries,  who  to-day  are  moving  so 
freely  over  the  newly  developing  countries  of  three  continents, 
placing  their  business  and  technical  ability  at  the  service  of  the 
economic  world.  The  new  movements  in  the  economic  develop- 
ment of  Asia  and  of  South  America  will  enormously  accelerate 
this  free  flow  of  business  ability  and  technical  skill  from  the 
more  advanced  Western  nations  over  the  relatively  backward 
countries,  and  will  also  bring  into  closer  cooperation  at  a  larger 
number  of  points  the  capital  and  management  of  Western 
peoples. 

My  object  in  referring  to  these  concrete  economic  movements 
of  our  time  is  to  illustrate  the  powerful  tendencies  which  are 
counteracting  the  old  false  realisation  of  industry  in  terms  of 
human  competition  and  antagonism,  and  are  making  for  a  con- 
scious recognition  of  its  cooperative  and  harmonious  character. 


CHAPTER  XVIII 

SOCIAL  HARMONY  IN  ECONOMIC  LIFE 

§  i.  A  brief  summary  of  the  actual  tendencies  towards  har- 
mony and  discord  at  present  visible  in  the  economic  world  may 
be  conveniently  presented  here. 

We  see  among  the  fundamental  industries  the  transformation 
of  the  structure  of  the  single  business;  large  numbers  of  little 
rivulets  of  savings  from  innumerable  separate  personal  sources 
merging  to  form  a  single  body  of  effective  capital;  large  numbers 
of  workers  closely  welded  into  a  single  body  of  effective  labour- 
power;  both  operating  in  normal  harmony  under  the  direction 
of  a  common  central  management,  and  engaged  in  the  continuous 
work  of  turning  out  a  product,  the  price  of  which  forms  the  com- 
mon income  alike  for  capitalists  and  workers.  So  far  as  that 
portion  of  the  dividend  is  concerned  which  forms  the  economically 
necessary  costs  of  these  masses  of  capital  and  labour,  there  exists 
a  harmony  of  interests  between  the  two  groups  of  claimants, 
which  is  more  clearly  recognised  with  every  improvement  of  the 
general  standard  of  intelligence  and  information.  In  most 
businesses  that  common  area  of  interest  covers  by  far  the  larger 
part  of  the  business  dividend.  Where  a  surplus  emerges  in  excess 
of  these  economic  costs,  an  initial  discord  arises  between  the 
claims  of  the  capital  and  labour.  But  this  discord  may  be  re- 
solved in  two  ways,  in  each  of  which  important  experiments, 
attended  by  a  growing  measure  of  success,  are  being  carried  on. 
Large  patches  of  the  area  of  discord  are  being  reclaimed  to  order 
by  the  modern  State,  whose  policy  is  more  and  more  directed 
to  absorbing  by  taxation,  and  applying  to  the  use  of  the  com- 
munity, great  shares  of  these  business  surpluses,  as  they  emerge 
in  incomes  and  inherited  properties.  As  regards  the  surplus 
which  is  not  so  absorbed,  the  grouped  forces  of  capital  and  labour 
within  the  business  are  constantly  engaged  in  seeking  to  discover 
pacific  and  equitable  modes  of  division  which  shall  reconcile,  or 

276 


SOCIAL  HARMONY  IN  ECONOMIC  LIFE  277 

at  least  mitigate,  the  remaining  opposition.  Though  this  re- 
mains at  present  the  sharpest  field  of  conflict,  pacific  forces  are 
making  more  gain  than  perhaps  appears  upon  the  surface.  Some 
of  those  industries,  where  such  discords  have  been  most  rife  and 
most  wasteful,  have  been  taken  over  by  the  State  or  the  Mu- 
nicipality. In  these  cases  such  quarrels  as  may  still  arise  in 
connection  with  the  claims  of  labour  admit  of  settlement  by 
other  means  than  economic  force.  In  others,  the  State  inter- 
venes on  behalf  of  public  order  by  assisting  to  promote  processes 
of  arbitration  or  conciliation.  In  others,  again,  the  organisation 
of  the  forces  of  capital  on  the  one  hand,  labour  on  the  other,  over 
the  whole  range  of  businesses  comprising  a  national  trade,  has 
tended  to  make  actual  conflicts  rarer,  and  presents  a  machinery 
capable  of  application  to  pacific  settlements.  Grave  as  are  the 
defects  in  the  working  of  this  machinery  of  Joint  Boards,  Sliding 
Scales,  Conciliation  and  the  like,  and  terrible  as  are  the  injuries 
these  defects  cause,  they  ought  not  to  blind  us  to  a  recognition 
of  the  fact  that  the  number  of  actual  conflicts  between  capital 
and  labour  is  constantly  diminishing. 

§  2.  This  truth  is  better  realised  when  we  turn  from  the  struc- 
ture of  the  business  to  that  of  the  trade  or  market.  There, 
though  keen  and  even  cut-throat  competition  still  survives,  the 
tendency  is  more  and  more,  especially  in  the  great  staple  in- 
dustries where  large  aggregates  of  capital  and  labour  are  em- 
ployed, towards  cooperation,  combination  and  trade  agreements. 
If,  for  the  moment,  we  ignore  the  dangers  which  such  combina- 
tions of  ten  threaten  to  consumers,  and  regard  them  from  the  stand- 
point of  trade  structure,  we  cannot  fail  to  recognise  the  enormous 
advance  they  represent  in  the  cause  of  industrial  harmony.  For 
whatever  the  degree  of  unity  attained  by  such  a  Trust,  Cartel, 
Conference,  Trade  Agreement,  Federation,  it  means  pro  tanto 
a  saving  of  the  energy  of  capital  and  labour  formerly  expended 
upon  conflict,  and  a  concentration  of  the  thoughts  and  purposes 
of  business  men  upon  the  best  performance  of  the  useful  functions 
of  production  which  constitute  the  social  value  of  their  trade. 
So  long  as  a  trade  remains  in  a  distinctively  competitive  con- 
dition, an  enormous  part  of  the  actual  energy  is  consumed  not 
in  production  but  in  warfare.  The  thoughts  and  wills  of  the  con- 


278  WORK  AND  WEALTH 

trollers  of  the  several  businesses  are  deflected  from  the  economical 
fulfilment  of  their  social  function  to  conscious  rivalry.  Neither 
the  capital  nor  the  labour  in  each  several  business  enjoys  a 
reasonable  measure  of  security;  and  not  only  the  profits  but  the 
wages  of  each  firm  are  jeopardised  by  the  success  of  a  stronger 
competing  firm.  The  growing  displacement  of  this  condition  of 
a  trade  by  the  principle  and  practice  of  combination  is  perhaps 
the  most  conspicuous  movement  towards  industrial  peace.  I 
am  aware  that,  in  itself,  this  concentration  and  combination  of 
businesses  within  a  trade  afford  no  sure  settlement  for  the  differ- 
ences between  capital  and  labour.  They  may  even  aggravate 
those  differences  in  several  ways.  For,  in  the  first  place,  such 
combinations  are  expressly  and  chiefly  designed  to  produce  a 
larger  quantity  of  surplus  profits,  thus  stimulating  conflict  by 
offering  a  larger  object  of  attack  to  labour.  In  the  second  place, 
such  combinations,  if  at  all  complete,  may  prove  more  clearly  than 
in  any  other  way  the  superiority  of  organised  capital  over  or- 
ganised labour  in  the  determination  of  wages  and  conditions 
of  labour.  Finally,  private  ownership  of  natural  resources, 
producing  for  its  owners  economic  rent,  remains  an  unsolved 
antagonism.  Though  the  extent  to  which  the  'surplus',  which 
monopolistic,  protected  or  otherwise  well-placed  businesses 
obtain,  as  open  or  concealed  'rent',  is  not  capable  of  exact 
estimate,  many,  if  not  most,  profitable  businesses  derive  some  of 
their  surplus  from  the  possession  or  control  of  natural  resources. 
Such  natural  resources  are  to  all  intents  and  purposes  capital,  so 
far  as  relates  to  issues  of  conflict  between  capital  and  labour. 
The  amount  and  possibly  the  proportion  of  surplus  (taking  the 
whole  industrial  world  into  consideration)  which  is  plain  or  dis- 
guised rent,  is  probably  upon  the  increase.  Even  in  Great 
Britain,  though  aggregate  rents  do  not  keep  pace  with  profits  and 
other  incomes  derived  from  business  capital,  they  probably  form 
an  increasing  proportion  of  that  income  which,  according  to  our 
definition,  ranks  as  'unproductive  surplus.'  Though  these 
rents,  like  other  ' unproductive  surplus,'  could  be  advantageously 
diverted  into  wages  on  the  one  hand,  public  revenue  upon  the 
other,  they  are  kept  on  the  side  of  capital  by  the  full  force  of 
combination. 


SOCIAL  HARMONY  IN  ECONOMIC  LIFE  279 

Thus  the  labour  in  any  trade  may  be  confronted  by  a  larger 
body  of  wealth  which  it  would  like  to  secure  for  higher  wages, 
while  at  the  same  time  it  finds  itself  less  able  to  achieve  this  object. 

§  3.  Equally  sharp  may  be  the  antagonism  of  interests  set  up 
between  such  a  combine  and  the  general  body  of  consumers,  by 
means  of  the  control  of  prices  which  the  former  possesses.  For 
the  large  surplus,  which  we  see  to  be  an  object  of  desire  to  the 
workers  hi  a  combination  or  trust,  represents  to  the  consumer  an 
excess  of  prices.  So  it  comes  to  pass  that  the  consumer,  unable 
to  combine  in  his  economic  capacity,  as  the  workers  do  in  their 
trade  unions,  combines  as  citizen  and  calls  upon  the  Govern- 
ment to  safeguard  him  against  monopolies.  His  first  instinctive 
demand  is,  that  such  combinations  shall  be  declared  illegal 
bodies,  acting  in  restraint  of  trade,  and  broken  up.  But  nothing 
proves  more  plainly  the  inherent  strength  of  the  cohesive  uni- 
fying tendencies  than  the  completeness  of  the  failure  to  achieve 
this  object.  When  business  men  desire  to  combine,  it  is  impossible 
to  force  them  to  compete.  The  alternatives  are,  either  to  leave 
the  consuming  public  to  the  tender  mercies  of  a  monopoly,  which, 
from  mere  considerations  of  profit,  may  not  be  able  to  raise  its 
prices  beyond  a  certain  limit,  or  else  to  impose  legal  regulations, 
or,  finally,  to  buy  out  the  business,  transferring  it  from  a  private 
into  a  public  monopoly. 

Wherever  the  modern  State  is  driven  to  confront  this  problem, 
it  is  compelled,  in  proportion  as  public  opinion  is  articulate  and 
politically  organised,  to  fasten  an  increasing  measure  of  public 
control  upon  such  powerful  combinations,  and  to  take  over  into 
the  sphere  of  State  enterprises  those  which  cannot  effectively  be 
controlled.  In  such  ways  does  modern  society  seek  to  heal  the 
new  discords  generated  by  the  very  processes  employed  by  the 
several  businesses  and  trades  in  their  search  after  an  internal 
harmony. 

But  the  largest  forms  of  capitalistic  enterprise  will  tend  more 
and  more  to  transcend  the  limits  of  any  single  state,  not  only  in 
their  composition  but  in  the  powers  they  exercise  upon  subsidiary 
industries,  and  upon  the  general  body  of  consumers  throughout 
the  industrial  world.1  The  privately  organised  apparatus  of 

1  The  foremost  example  of  such  organisation  in  a  great  staple  industry  is  the  In- 


28o  WORK  AND  WEALTH 

economic  machinery,  which  constitutes  the  fabric  of  this  eco- 
nomic world-state,  has  been  described  as  a  striking  example  of 
the  expansion  of  industrial  solidarity  and  harmony.  But  here 
again  the  possibilities,  nay,  certainties,  of  new  discord  between 
capital  and  labour,  producer  and  consumer,  cannot  be  ignored. 
Hence  the  great  social  problems  of  the  future  will  to  a  less  and 
less  extent  lie  within  the  political  competence  of  single  states  or 
be  soluble  by  the  separate  action  of  the  Governments  of  those 
states.  The  vast  currents  of  international  capital  and  labour 
cannot  flow  without  great  disturbances  of  order  and  of  economic 
interests  often  affecting  several  nations.  The  safe,  successful, 
profitable,  pursuit  of  large  foreign  enterprises  by  the  capital  and 
labour  of  persons  belonging  to  many  nationalities,  will  more  and 
more  involve  common  political  action. 

§  4.  We  are  already  beginning  to  recognise  that  our  State  is 
disabled  for  the  fully  satisfactory  solution  of  some  of  the  most 
pressing  of  our  social  problems.  The  immigration  of  foreign 
labour  complicates  our  treatment  of  sweated  industries.  The 
improvement  of  conditions  of  labour  in  our  trades  may  be  ren- 
dered more  difficult  by  the  admission  of  sweated  imports,  or  our 
feelings  may  be  shocked  by  the  influx  of  the  products  of  slave 
labour.  The  policy  of  taxing  interests  and  profits  may  be 
thwarted  by  our  inability  to  trace  the  incomes  derived  from 
foreign  investment  and  trade.  A  financial  crisis  in  America  or 
Germany  may  deplete  our  gold  reserve  and  work  havoc  on  our 
credit.  As  these  movements  gather  force  and  frequency,  the 
impotence  of  any  single  State  to  exercise  an  effective  control 
over  the  primary  economic  interests  of  its  people  will  grow  more 
apparent.  The  gravest  social-economic  problems  will  be  found 
insoluble  except  by  international  arrangement.  An  era  of  free 
conferences  and  of  more  or  less  loose  agreements  between  States 
will  lay  the  foundation  for  what  in  time  must  amount  to  inter- 
national regulation  of  industry.  In  other  words,  the  economic 
internationalism,  which  I  have  traced,  will  weave  for  itself  the 

ternational  Iron  &  Steel  Association,  formed  in  July  1911  by  representatives  of 
Austria,  Belgium,  Canada,  France,  Germany,  Great  Britain,  Hungary,  Russia, 
Spain,  United  States.  The  objects  of  this  organisation  were  to  regulate  production, 
so  as  to  control  profitable  prices  and  to  prevent  undercutting  in  times  of  depression. 
(Cf.  Chiozza-Money,  Things  that  Matter,  Ch.  XI). 


SOCIAL  HARMONY  IN  ECONOMIC  LIFE  281 

necessary  apparel  of  political  institutions.  The  true  germ  of 
world-federation  is  perhaps  to  be  traced  to-day  less  clearly  at  the 
Hague  than  at  Bern,  where  the  representatives  of  the  leading 
industrial  nations  have  already  met  to  set  the  seal  of  their  re- 
spective governments  upon  undertakings  to  promote  common 
policies  of  legislation  in  such  matters  as  the  regulation  of  night 
labour  for  women,  and  the  disuse  of  poisonous  ingredients  in  the 
match  trade.  In  such  agreements,  as  in  the  better-known  Postal 
Union  (which  also  has  its  offices  at  Bern),  one  finds  the  earliest 
contributions  made  by  modern  industrialism  to  the  federal  gov- 
ernment of  the  world. 

These  facts  I  cite,  partly  to  enforce  the  thesis  that  the  ten- 
dencies of  modern  industry  which  make  for  harmony  and  coopera- 
tion are  gaining,  both  in  the  smaller  and  the  larger  areas,  over 
those  which  make  for  discord  and  for  competition.  This  grow- 
ing harmony  of  fact  must  tend  to  evoke  a  corresponding  harmony 
of  thought  and  feeling.  But  here  we  are  retarded  by  a  set  of 
psychological  obstacles  which  pervert  or  disguise  the  truth.  I 
have  alluded  to  the  damage  due  to  the  false  representation  of  na- 
tions as  rival  traders,  contending  for  a  limited  market  upon  terms 
which  signify  that  the  gain  of  one  is  the  loss  of  another.  But  the 
whole  intellectual  and  moral  atmosphere  is  thick  with  similar  mis- 
takes of  fact  and  fallacies  of  reasoning,  chiefly  sustained  by  false 
phrases  which  evoke  false  images  and  arouse  injurious  desires 
and  passions.  Ordinary  business  language  is  filled  with  selfish, 
separatist  and  combative  phrases,  representing  trade  as  a  warfare, 
in  which  every  man  must  fight  for  his  own  hand,  must  force  his 
wares  upon  the  public,  outwit  or  bludgeon  his  competitors,  con- 
quer new  markets,  beat  down  the  prices  of  the  goods  he  buys, 
or  in  finance  become  a  'bull'  or  a  'bear.'  In  certain  large  de- 
partments of  the  business  world  there  still  remains  so  much  dis- 
order, insecurity  and  competition  as  to  afford  support  to  these 
combative  views  and  feelings.  But  they  are  no  longer  repre- 
sentative of  the  main  normal  activities  of  industry,  and  they 
ought  and  must  by  degrees  be  displaced  by  views  and  feelings 
accommodated  to  the  more  organic  conception.  It  is  an  im- 
portant task  of  economic  science  to  enforce  conceptions  of 
the  operation  of  economic  laws  which  will  support  these  newer 


282  WORK  AND  WEALTH 

and  sounder  views  and  feelings.  For  only  with  this  growing 
recognition  of  the  social  harmony  represented  by  industry  can 
the  social  will  be  nourished  that  is  necessary  to  support  and 
further  it.  So  long  as  the  ordinary  business  man  or  worker  has 
his  eyes,  his  mind,  his  heart  and  will,  glued  to  the  tiny  patch  of 
industry  to  which  his  own  directly  personal  effort  is  applied,  the 
pulse  of  humanity  beats  feebly  through  the  system  of  industry. 
But  let  the  ordinary  education  of  every  man  and  woman  impose 
clear  images  of  this  economic  order  as  a  great  human  coopera- 
tion in  which  each  bears  an  essential  part,  as  producer,  consumer 
and  citizen,  the  quickened  intelligence  and  sympathy  will 
respond,  so  that  the  blind  processes  of  cooperation  will  become 
infused  and  strengthened  by  the  current  of  a  conscious  will. 


CHAPTER  XIX 

INDIVIDUAL  MOTIVES   TO   SOCIAL   SERVICE 

§  i.  Our  examination  of  the  existing  industrial  system  discloses 
certain  discords  of  interest  and  desire  between  the  owners  of  the 
several  factors  of  production,  on  the  one  hand,  between  pro- 
ducers and  consumers  on  the  other.  Among  the  owners  of  factors 
of  production  the  sharpest  antagonisms  are  those  between  the 
capitalist  employer  and  the  wage-earner,  and  between  the  land- 
owner and  the  owners  of  all  other  factors.  Except  as  regards  the 
ownership  of  land,  these  antagonisms  are  not  absolute  but 
qualified.  The  interests  of  capital  and  labour,  of  producer  and 
consumer,  march  together  up  to  a  certain  point.  There  they 
diverge.  These  discords  of  interest  materialise  in  what  we  term 
'the  surplus,'  that  portion  of  the  product  which,  though  not 
essential  to  the  performance  of  the  economic  process,  passes 
to  capital,  labour  or  the  consumer,  according  to  the  economic 
strength  which  natural  or  artificial  conditions  assign  to  each. 
The  humanisation  and  rationalisation  of  industry  depend,  as  we 
recognise,  upon  reforming  the  structure  of  businesses  and  in- 
dustries, so  as  to  resolve  these  discords,  to  evoke  the  most 
effective  cooperation,  in  fact  and  will,  between  the  several  parties, 
and  to  distribute  the  whole  product,  costs  and  surplus,  among 
them  upon  terms  which  secure  for  it  the  largest  aggregate  utility 
in  consumption.  The  operation  of  industry  upon  this  truly  and 
consciously  cooperative  basis,  would,  it  is  contended,  evoke  in- 
creased productive  powers,  by  bringing  into  play  those  instincts 
of  mutual  aid  that  are  largely  inhibited  by  present  methods, 
and  by  distributing  the  increased  product  so  as  to  evoke  the 
highest  personal  efficiency  of  life  and  character. 

But  it  would  be  foolish  to  ignore  the  doubts  and  objections 
which  are  raised  against  the  spiritual  assumption  upon  which 
this  ideal  of  human  industry  is  based.  It  is  often  urged  that 
man  is  by  nature  so  strongly  endowed  with  selfish  and  com- 

283 


284  WORK  AND  WEALTH 

bative  feelings,  so  feebly  with  social  and  cooperative,  that  he 
will  not  work  efficiently  under  the  reformed  economic  structures 
that  are  proposed.  He  must  be  allowed  free  scope  to  play  for 
his  own  hand,  to  exercise  his  fighting  instincts,  to  triumph  over 
his  competitors,  and  to  appropriate  the  prizes  of  hazard  and 
adventure,  the  spoils  attesting  personal  force  and  prowess,  or 
else  he  will  withhold  the  finest  and  most  useful  modes  of  his 
economic  energy. 

The  distinctively  spiritual  issue  thus  raised  is  exceedingly 
momentous.  Suppose  that  the  business  life  can  be  set  upon 
what  appears  to  be  a  sound  and  equitable  basis,  is  human  nature 
capable  of  responding  satisfactorily  to  such  an  environment? 
Putting  it  more  concretely,  are  the  actual  powers  of  human 
sympathy  and  cooperation  capable  of  being  organised  into  an 
effective  social  will?  This  issue  is  seen  to  underlie  all  the  doubts 
and  difficulties  that  beset  the  proposals  to  apply  our  organic 
Law  of  Distribution  for  purposes  of  practical  reform.  All  pro- 
posals by  organised  public  effort  to  abolish  destitution  give  rise 
to  fears  lest  by  so  doing  we  should  sap  the  incentives  to  personal 
effort,  and  so  impair  the  character  of  the  poor.  Among  such 
critics  there  is  entertained  no  corresponding  hope  or  conviction 
that  such  a  policy  may,  by  the  better  and  securer  conditions  of 
life  and  employment  it  affords,  sow  the  seeds  of  civic  feeling  and 
of  social  solidarity  among  large  sections  of  our  population  whose 
life  hitherto  had  been  little  else  than  a  sordid  and  unmeaning 
struggle.  Proposals  to  secure  for  public  use  by  process  of  taxa- 
tion larger  shares  of  surplus  wealth  are  met  by  similar  apprehen- 
sions lest  such  encroachments  upon  private  property  should 
impair  the  application  of  high  qualities  of  business  and  profes- 
sional ability.  The  growing  tendency  of  States  and  Municipa- 
lities to  engage  in  various  business  operations  is  strongly  and 
persistently  attacked  upon  the  ground  that  sufficient  public 
spirit  cannot  be  evoked  to  secure  the  able,  honest  management 
and  efficient  working  of  such  public  concerns. 

Finally,  the  whole  basic  policy  of  the  Minimum  Wage  and  the 
Maximum  Working-day  is  assailed  on  the  same  ground  as  a 
levelling  down  process  which  will  reduce  the  net  productivity 
of  industry  and  stop  all  economic  progress. 


INDIVIDUAL  MOTIVES  TO  SOCIAL  SERVICE       285 

§  2.  To  such  criticism  two  replies  are  possible,  each  valid 
within  its  limits.  The  first  consists  in  showing  that  the  existing 
business  arrangements  are  extremely  ill-adapted  for  offering  the 
best  and  most  economically  effective  stimuli  to  individual  pro- 
ductivity. They  are  not  well-directed  to  discover,  apply,  and 
improve  the  best  and  most  profitable  sorts  of  human  ability 
and  labour.  In  other  words,  the  actual  system  for  utilising 
selfishness  for  industrial  purposes  is  wofully  defective:  nine- 
tenths  of  the  power  remains  unextracted  or  runs  to  waste. 

Those  who  rely  upon  this  criticism  base  their  reform  policy 
upon  the  provision  of  better  economic  opportunities  and  better 
personal  stimuli  to  individuals.  But  such  reforms  will  not  suffice. 
What  is  needed  above  all  is  a  social  soul  to  inhabit  the  social 
body  in  our  industrial  system.  A  conscious  coordinating  prin- 
ciple— an  industrial  government,  in  which  the  consent  of  the 
governed  shall  be  represented  in  their  several  wills  and  con- 
sciousness as  well  as  in  some  central  organic  control — is  to  be 
desiderated.  Now  is  this  condition  of  thought  and  of  desire 
really  attainable?  Can  we  really  suppose  that  any  sort  of  educa- 
tion is  likely  to  arouse  and  maintain  in  the  rank-and-file  of  em- 
ployees either  in  the  public  services  or  in  the  great  private 
industries  a  sense  of  public  duty  and  a  realisation  of  the  larger 
industrial  harmony,  which  will  compensate  in  any  appreciable 
measure  for  the  dulness  and  drudgery  of  their  particular  job, 
and  furnish  an  effective  check  upon  shirking  or  slacking?  Sup- 
pose that  a  salary  basis  of  payment,  a  shortened  work-day  and 
security  of  tenure,  with  adequate  insurance  against  economic 
mishaps,  had  been  obtained  in  all  regular  occupations,  would  the 
quickened  sense  of  cooperation  yield  a  productive  energy  ade- 
quate to  the  requirements? 

To  this  question  it  must,  I  think,  be  frankly  answered,  that 
we  cannot  tell.  We  have  no  sufficient  data  for  a  confident  reply. 
The  general  reply  of  business  men  and  of  economists  would,  I 
think,  be  in  the  negative.  It  would  be  urged  that  the  greater 
part  of  the  routine  work  of  industry  will  always  remain  so  dull 
and  tiresome,  the  sense  of  public  duty  so  weak  and  intermittent, 
that  the  fixed  salary  basis  of  remuneration  will  not  prove  an 
adequate  incentive  for  the  required  amount  of  human  effort. 


286  WORK  AND  WEALTH 

The  experience  of  existing  social  services  would  be  adduced 
in  support  of  this  judgment.  Public  employees,  it  is  complained, 
work  with  less  energy  than  private  employees;  there  is  more 
slacking  and  scamping  and  more  malingering;  the  'government 
stroke'  has  become  a  by-word.  The  dignity  of  social  service 
does  not  evoke  any  clear  response  in  the  breast  of  the  employee. 
Such  is  the  complaint.  It  is  probably  not  ill-founded.  The 
great  mass  of  public  employees  are  certainly  not  animated  by 
much  conscious  pride  and  satisfaction  in  rendering  social  service. 
But,  before  registering  a  final  judgment  upon  such  evidence, 
certain  qualifying  considerations  must  be  taken  into  account. 

The  attitude  of  a  worker  towards  his  work  will  be  strongly 
affected  by  the  prevailing  attitude  of  those  around  him.  So 
long  as  the  general  economic  environment  is  one  hi  which  the  in- 
terests of  employer  and  employed  are  represented  as  antagonistic, 
similar  ideas  and  sentiments  will  continue  to  affect  the  feelings 
of  public  servants.  They  will  not  realise  that  they  are  working 
for  themselves  in  working  for  society  of  which  they  are  members: 
they  will  treat  the  department  for  which  they  work  rather  as 
an  alien  or  a  hostile  body,  bent  upon  getting  as  much  out  of 
them  and  giving  as  little  as  possible.  It  is  just  here  that  we 
touch  the  most  sensitive  spot  in  the  psychology  of  government, 
the  best  recognised  defect  of  bureaucracy.  The  higher  officials, 
who  control  and  manage  public  businesses,  evoke  in  the  rank- 
and-file  of  the  public  employees  very  much  the  same  sentiments 
of  estrangement  or  opposition  that  prevail  in  most  private 
businesses  between  employer  and  employee.  For  in  point  of 
fact,  the  temper  and  mental  attitude  of  higher  officials  are  those 
of  a  master  in  his  own  business,  not  those  of  a  public  servant. 
That  affects  their  dealings  not  only  with  the  rank-and-file  in 
their  department,  but  with  the  outside  public.  In  a  so-called 
democracy,  where  the  highest  as  well  as  the  lowest  officers  of 
state  are  paid  by  the  people  to  do  work  for  the  people,  no  method 
of  effective  popular  control  over  the  official  services  has  yet  been 
devised.  The  absence  of  any  such  control  is  clearly  recognised 
by  all  high  officials,  and  it  powerfully  influences  their  mind  and 
their  behaviour.  Uncontrolled,  or  insufficiently  controlled  power, 
of  course,  affects  differently  different  types  of  men.  It  induces 


INDIVIDUAL  MOTIVES  TO  SOCIAL  SERVICE       287 

slackness  and  the  adoption  of  a  slow  conservative  routine  in 
those  of  torpid  disposition.  Men  of  arbitrary  temper  will  be 
led  to  despotic  treatment  of  their  staff.  Men  of  brains  and  en- 
terprise will  be  free  to  embark  upon  expensive  enterprises,  to 
the  gain  or  loss  of  their  paymasters.  But  in  no  case  does  the 
actual  situation  favour  the  permeation  of  the  public  service  by 
a  full  sense  of  social  cooperation  and  joint  responsibility.  High 
officials  may  and  often  do  exhibit  great  energy  and  disinterested 
zeal  in  the  public  service.  But  the  sense  of  mastery,  both  in 
relation  to  the  lower  grades  of  employee  and  to  the  public,  is 
always  discernible.  They  have  this  power  and  they  know  it. 
Until,  therefore,  the  sense  of  public  service  can  be  made  a  reality 
among  the  higher  public  officers,  no  true  test  of  the  efficacy  of 
the  general  will  is  to  be  obtained.  This  reformation  of  Bureau- 
cracy is  the  chief  crux  of  modern  democracy.  For  unless  some 
mode  is  found  of  expelling  from  the  higher  public  servants  the 
pride  of  caste,  and  of  keeping  them  in  sympathetic  contact  with 
the  general  current  of  popular  feeling,  the  mass  of  the  subordinate 
employees  will  not  respond  to  the  social  claim  upon  their  eco- 
nomic energies. 

Finally,  the  familiar  criticism  of  the  inefficiency  of  public  em- 
ployees in  this  country  does  not  take  proper  account  of  conditions 
of  employment.  For  while  the  top  grade  of  officials  is  paid  more 
handsomely  and  enjoys  more  dignity  and  security  than  in  other 
countries,  the  lower  grades  are  often  subject  to  conditions  of  pay, 
hours  and  tenure,  not  appreciably  better  than  those  prevailing 
in  the  ordinary  labour-market.  Until  these  conditions  are  im- 
proved, it  may  reasonably  be  contended  that  the  dignity  of 
public  service  cannot  be  expected  to  furnish  an  effective  economic 
motive. 

If,  however,  increased  security  of  life  and  livelihood  could  be 
obtained  for  the  people,  with  such  improvement  of  our  educa- 
tional system  as  provided  adequate  opportunities  for  enabling  the 
children  of  the  poorer  classes  to  enter  all  grades  of  the  public 
services,  the  beginnings  of  a  great  change  in  the  spirit  of  those 
services  might  be  attained.  For,  if  the  wide  gaps  of  dignity  and 
of  emoluments,  which  divide  at  present  the  higher  from  the 
lower  grades,  could  be  reduced,  while  at  the  same  time  effective 


288  WORK  AND  WEALTH 

publicity  and  criticism  could  be  brought  to  bear  upon  all  de- 
partments of  public  work,  the  'bureaucratic  state'  might  be 
transformed  into  something  more  nearly  approaching  a  self- 
governing  society. 

§  3.  The  cool  practical  business  men  will,  however,  probably 
insist  that  none  of  these  devices  for  improving  education  and 
for  stimulating  public  spirit  will  enable  a  public  department  to 
get  out  of  its  employees  so  large  an  output  of  productive  energy 
as  can  be  secured  by  the  stimuli  of  private  profit-seeking  enter- 
prise. And  this  may  possibly  be  true.  But  those  who  have 
accepted  the  general  lines  of  our  analysis  will  recognise  that  such 
an  admission  is  not  fatal  to  the  case  for  salaried  employment  and 
public  service.  For  the  private  business  is  primarily  concerned 
with  one  side  of  the  human  equation,  the  product,  and  is  able 
in  large  measure  to  ignore  the  human  costs  involved  in  getting 
it.  But  the  State,  as  representing  the  human  welfare  of  its 
members,  must  take  the  costs  into  account  as  well.  An  intelli- 
gent Society  would  regard  it  as  a  foolish  policy  to  attempt  to  get 
out  of  its  employees  the  amount  of  daily  toil  imposed  under  the 
conditions  of  most  profit-making  businesses.  While,  therefore, 
it  is  true  that  a  public  service,  run  upon  an  adequate  basis  of 
fixed  salary  and  short  work-day,  would  stand  condemned,  if  the 
output  of  effective  energy  per  man  fell  greatly  below  that  furnished 
under  the  drive  of  ordinary  capitalism,  a  slight  reduction  of  that 
output  might  be  welcomed  as  involving  an  actual  gain  in  human 
welfare.  The  diminished  utility  of  the  product  might  be  more 
than  compensated  in  terms  of  human  welfare  by  the  diminished 
human  cost  of  the  productive  process. 

It  is  not,  therefore,  incumbent  upon  the  advocates  of  a  new 
industrial  order,  based  upon  a  closer  application  of  the  organic 
law,  to  show  that  such  an  order  will  yield  at  least  as  large  an 
output  of  economic  energy  and  economic  product  as  can  be  got 
out  of  the  mixed  competition  and  combination  which  prevail 
at  present.  Applying  this  standard  of  human  valuation,  they  are 
entitled  to  set  off  against  any  reduction  of  purely  economic 
stimuli  that  may  ensue  from  their  reforms,  not  only  the  relief 
in  human  costs  which  accompanies  such  reduction  but  the  en- 
largement of  other  human  gains. 


INDIVIDUAL  MOTIVES  TO  SOCIAL  SERVICE       289 

For,  though  in  this  endeavour  to  value  industrial  activities 
and  products  in  terms  of  human  welfare,  we  have  for  the  most 
part  confined  ourselves  to  the  human  costs  and  utilities  directly 
connected  with  the  processes  of  economic  production  and  con- 
sumption, we  cannot  ignore  the  wider  meaning  of  these  pro- 
cesses. Man  lives  not  by  bread,  or  economic  goods,  alone,  but 
by  'admiration,  hope  and  love/  Though  the  various  non- 
economic  goods  and  activities  do  not  directly  enter  into  our 
human  valuation  of  industry,  we  cannot  neglect  the  interac- 
tions between  the  economic  and  the  other  human  interests  in- 
volved in  the  organic  nature  of  man  and  of  society. 

§  4.  The  wider  problem  of  human  economy,  the  employment 
of  all  human  powers  for  human  welfare,  must  in  fact  involve  a 
continual  readjustment  between  the  respective  claims  of  the 
economic  and  the  non-economic  activities  upon  our  lives.  Most 
thoughtful  critics  of  our  age  complain  that  this  adjustment  is 
defective  in  that  business  bulks  too  largely  in  our  lives.  They 
consider  that  our  modern  command  over  the  resources  of  nature 
for  the  satisfaction  of  our  wants  ought  to  issue  not  so  much  in 
the  larger  supply  of  old,  and  the  constant  addition  of  new  eco- 
nomic wants,  as  in  the  increased  liberation  of  human  powers  for 
other  modes  of  energy  and  satisfaction.  There  exist  whole  coun- 
tries even  in  our  time,  such  as  China,  where  population  lies  so  thick 
upon  the  earth,  and  where  the  arts  of  industry  remain  so  primi- 
tive, that  virtually  the  whole  vital  energy  of  the  people  must  be 
absorbed  in  the  economic  processes.  This  is  not  our  case.  With 
our  improving  arts  of  industry  and  our  dwindling  growth  of 
population,  we  can  afford  to  give  an  increasing  share  of  our  in- 
terests and  energies  to  the  cultivation  and  enjoyment  of  intel- 
lectual and  moral  goods.  The  gradual  realisation  of  this  human 
economy  is  the  best  measure  of  our  civilisation.  Our  greatest 
impediment  in  this  progress  is  the  superstitious  and  excessive 
value  put  by  all  classes  of  our  people  upon  industry  and  property. 
This  is  almost  identical  with  a  charge  of  materialism,  for  economic 
values  centre  round  material  forms  of  property.  'Getting  and 
spending  we  lay  waste  our  powers. '  This  is  a  literal  statement 
of  our  bad  economy.  Until  we  can,  as  a  nation,  throw  off  the 
dominion  of  the  economic  spirit,  we  cannot  win  the  spiritual 


29o  WORK  AND  WEALTH 

liberty  needed  for  the  ascent  of  man.  So  long  as  we  stand,  for 
full  six-sevenths  of  our  time  and  more,  with  hands  and  eyes,  in- 
telligence and  will,  dedicated  to  the  service  of  industrialism,  we 
cannot  see,  much  less  realise,  better  ideals  of  humanity.  Ab- 
sorbed in  earning  a  livelihood,  we  have  no  time  or  energy  to  live. 

Such  sentences  as  these,  I  am  well  aware,  have  become  com- 
monplaces, and  such  wisdom  as  they  contain  has  so  become 
almost  impotent.  This  drawing  of  the  fangs  of  truth  by  reducing 
it  to  truisms  is  one  of  the  most  serious  obstacles  to  intellectual 
and  moral  progress.  From  the  time  of  Wordsworth  to  the 
present  day  our  wisest  teachers  have  demanded  that  industry 
and  property  shall  be  put  in  their  right  places  as  servants,  not 
masters,  of  men,  and  that  our  conquest  over  nature  shall  be 
attended  by  a  liberation  of  all  sorts  and  conditions  of  men  from 
the  tyranny  of  matter.  In  no  adequate  degree  has  this  liberation 
been  achieved.  The  iron  of  industrialism  has  entered  so  deeply 
into  our  souls  that  we  are  loth  to  use  our  liberty.  Why  is 
this  so? 

Man  is  a  spiritual  as  well  as  a  material  being.  His  ascent  in 
civilisation  implies  an  increasing  satisfaction  of  his  spiritual 
needs.  In  this  higher  life  economic  processes  and  market  values 
play  a  diminishing  part.  How  comes  it,  then,  that  the  vast 
economies  of  modern  industry  have  done  so  little  to  release  us 
from  the  bondage  of  the  economic  system?  Why  have  industry 
and  property  retained  so  dominant  a  grasp  upon  our  thoughts  and 
feelings,  continually  checking  our  aspirations  to  the  higher  life, 
continually  encroaching  on  the  time  and  energy  which  by  rights 
would  seem  to  belong  to  that  life? 

§  5.  The  true  answer  to  these  questions  is  not  difficult  to 
find.  We  have  sketched  a  growing  order,  harmony  and  unity, 
of  industrial  life,  concerned  with  the  regular  supply  of  economic 
needs  for  mankind.  Were  such  an  order  effectively  achieved, 
in  accordance  with  the  rational  and  equitable  application  of  our 
human  law  of  distribution,  the  economy  of  industrial  processes 
would  be  accompanied  by  a  corresponding  economy  of  thought 
and  emotion  among  the  human  beings  engaged  in  this  common 
cooperation.  This  social  economy  demands,  as  we  have  seen,  the 
substitution  of  social  welfare  for  private  profit  as  the  directing 


INDIVIDUAL  MOTIVES  TO  SOCIAL  SERVICE        291 

motive  throughout  industry.  But  it  does  not  imply  a  com- 
pletely socialistic  system  in  which  each  productive  process  is 
under  the  direct  and  exclusive  control  of  Society.  For  that 
assertion  of  absolute  unity  would  contain  a  denial  of  the  mani- 
foldness  of  desire  and  purpose  involved  in  the  very  concept 
cooperation.  Scope  must  remain,  in  the  interests  of  society  it- 
self, for  the  legitimate  play  of  individuality.  The  well-ordered 
society  will  utilise  the  energies  of  egoism  in  fruitful  fields  of  in- 
dividual activity.  The  human  ego  will  always  seek  a  directly 
personal  self-expression  in  the  free  exercise  of  artistic  instincts 
and  other  creative  or  adventurous  activities  that  yield  the  glory 
of  achievement. 

These  primarily  self-regarding  impulses  are  made  socially  pro- 
fitable by  allowing  them  free  expression  in  these  fields.  The 
attempt  to  regulate  and  direct  these  impulses  and  their  pro- 
ductive activities  would  be  disastrous.  This  play  of  unfettered 
personality  in  the  fine  arts,  in  literature,  in  the  unsettled  and 
experimental  section  of  each  profession  and  each  trade,  must  be 
conserved,  not  as  an  inherent  right  of  individuals  but  as  a  sound 
social  economy.  For  the  distinction  between  these  free  creative 
activities  and  the  ordinary  run  of  routine  work  in  the  trade  and 
professions  is  fundamental.  It  is  not  that  the  former,  the  free 
unorganised  activities,  are  not  as  truly  social  as  the  latter  in  their 
ultimate  significance  and  worth.  But  their  social  value  is  best 
secured  by  leaving  them  to  the  stimuli  of  personal  interests.  The 
creative  activities,  including  all  work  which  pleasure,  interest, 
surprise  or  personal  pride,  cause  to  be  desired  upon  its  own 
account,  need  no  social  compulsion  to  evoke  them.  Their  product 
is  the  free  gift  which  the  individual  makes  to  the  commonwealth 
out  of  the  riches  of  his  active  personality.  As  their  cost  to  him 
is  more  than  compensated  by  the  pleasures  of  creation,  he  will 
contribute  them  freely  to  the  service  of  mankind.  But  even  if 
a  coarser  streak  of  selfishness  causes  the  creative  artist,  poet, 
inventor,  discoverer,  to  claim  some  large  share  of  the  marketable 
value  of  his  product  for  himself,  it  will  better  serve  society  to 
pay  him  his  price,  than  to  attempt  to  'organise'  creation  on  a 
public  basis.  Such  sufficient  material  rewards  of  genius  or  high 
talent,  if  they  are  really  necessary  to  evoke  the  creative  activity, 


292  WORK  AND  WEALTH 

must  rightly  be  considered  'costs'  rather  than  'surplus.'  There 
will  remain  a  margin  of  such  unfettered  private  enterprise,  not 
only  in  the  fine  arts  and  the  learned  professions,  where  the  crea- 
tive mind  seems  most  in  evidence,  but  at  the  growing  point  of 
every  living  industry.  For  the  distinction  between  creation  and 
imitation  or  routine,  as  we  have  seen,  cannot  be  applied  in  a 
wholesale  way  to  entire  trades  and  occupations.  Budding  and 
experimental  industries,  involving  large  application  of  inventive 
and  constructive  energy,  appealing  to  new  and  uncertain  tastes, 
carrying  heavy  risks  of  capital  and  reputation,  are  better  left  to 
individual  enterprise.  The  same  industries,  settled  on  estab- 
lished lines,  with  smaller  risks  and  smaller  opportunities  of  useful 
change,  will  properly  pass  under  direct  social  control.  It  is  hardly 
conceivable  that  the  development  of  the  motor-car  and  the  aero- 
plane could  have  been  so  rapid,  if  these  industries  had  been  at  the 
outset  claimed  as  State  monopolies  and  official  experts  had  alone 
been  set  to  operate  them.  The  injurious  retardation  of  electric 
lighting  and  transport  in  this  country  by  the  legal  shackles  im- 
posed upon  them  has  been  a  striking  testimony  to  the  social  harm 
done  by  premature  application  of  social  control  to  an  industry  in 
its  early  experimental  stage. 

On  the  other  hand,  it  is  equally  foolish  to  exclude  from  effect- 
ive social  regulation  or  state  organisation  entire  professions, 
such  as  teaching,  law,  or  medicine,  on  the  ground  that  they  are 
essentially  'creative.'  For  they  are  not.  The  very  name  pro- 
fession implies  the  adoption  of  prescribed  and  accepted  methods 
for  dealing  with  large  ordinary  classes  of  cases,  that  is  to  say 
routine  procedure.  Though,  as  we  recognise,  such  procedure 
may  never  reach  the  same  degree  of  mechanical  routine  as  pre- 
vails in  ordinary  processes  of  manufacture,  the  common  factors 
may  be  so  predominant  as  to  bring  them  properly  under  the  same 
public  regimen.  Though,  for  example,  class-teaching  will  always 
carry  some  element  of  originality  and  personal  skill,  a  true  regard 
for  public  interests  establishes  close  public  control  of  curriculum 
and  method  in  those  branches  of  instruction  in  which  it  is  con- 
venient to  give  the  same  teaching  to  large  numbers  of  children 
at  the  same  time.  In  education,  as  in  medicine  and  in  every 
other  skilled  calling,  there  are  grades  of  practice  rightly  classed 


INDIVIDUAL  MOTIVES  TO  SOCIAL  SERVICE        293 

as  regular  or  routine.  Where  it  is  important  for  members  of  the 
public  to  be  able  to  obtain  such  services,  in  reliable  qualities 
upon  known  and  reasonable  terms,  effective  social  control  of  them 
must  be  secured.  For,  otherwise,  a  power  of  private  tyranny  or 
of  extortion  or  neglect  is  vested  in  the  producers  of  such  services. 
The  inadequate  public  control  over  the  medical  and  legal  services 
in  this  country  is  raising  a  crop  of  grave  practical  problems  for 
early  solution. 

So  in  every  industry  or  occupation  the  relatively  routine  work 
requires  direct  social  organisation  while  the  preponderantly 
creative  work  should  be  left  to  'private'  enterprise.  The  former 
class  contains  the  great  bulk  of  those  industries  which,  concen- 
trated in  large  businesses  for  the  profitable  supply  of  the  prime 
needs  and  conveniences  of  ordinary  men  and  women,  breed  com- 
binations and  monopolies.  Whereas  in  the  creative  industries 
there  exists  a  natural  harmony  of  interests  between  producer 
and  consumer  that  will  secure  to  society  the  best  fruits  of  in- 
dividual effort,  this  is  not  the  case  in  the  routine  industries. 
There  the  operation  of  the  human  law  of  distribution  can  only 
be  secured  by  direct  social  organisation.  Only  thus  can  excessive 
private  surplus,  involving  a  tyranny  over  labour  on  the  one  hand, 
the  consumer  on  the  other,  be  prevented.  In  no  other  way  can 
the  main  organs  of  industry  be  infused  with  the  human  feelings 
of  solidarity  and  cooperation  essential  to  the  stability  and  pro- 
gress of  social  industries. 

§  6.  For  to  this  vital  point  we  must  return.  The  substitution 
of  direct  social  control  for  the  private  profit-seeking  motive  in  the 
normal  processes  of  our  industries  is  essential  to  any  sound  scheme 
of  social  reconstruction.  For  not  otherwise  can  we  get  the  social 
meaning  of  industry  represented  consciously  in  the  cooperative 
will  of  the  human  factors  of  production.  It  is  not  too  much  to 
say  that  the  pace  of  civilisation  for  nations,  of  moral  progress 
for  individuals,  depends  upon  this  radical  reconstruction  of 
common  industry.  For  the  existing  structure  of  ordinary  busi- 
ness life  inhibits  the  realisation  of  its  social  meaning  by  the  stress 
it  lays  upon  the  discordant  and  the  separatist  interests.  The 
struggle  to  keep  or  to  improve  one's  hold  upon  some  place  in  the 
industrial  system,  to  win  a  livelihood,  to  make  some  gain  that  in- 


294  WORK  AND  WEALTH 

volves  a  loss  to  someone  else,  derationalises  the  intelligence  and 
demoralises  the  character  of  all  of  us. 

This  derationalisation  and  demoralisation  are  seen  to  be 
rooted  in  the  defective  structure  and  working  of  industrialism 
itself. 

If  Industry  were  fairly  apportioned  among  all,  according  to  the 
capability  of  each,  if  Property  were  allotted  to  each  according  to 
his  needs,  by  some  natural  process  of  distribution  as  regular  and 
certain  as  the  process  of  the  planets,  persons  would  not  need  to 
think  or  feel  very  keenly  about  such  things  as  Industry  and 
Property:  their  intellects  and  hearts  would  be  free  for  other  in- 
terests and  activities. 

But  the  insecurity,  irregularity  and  injustice  of  economic 
distribution  keep  Industry  and  Property  continually  in  the  fore- 
ground of  the  personal  consciousness. 

Here  comes  into  terrible  relief  the  moral  significance  of  the 
unearned  Surplus — the  term  which  gathers  all  the  bad  origins 
of  Property  into  the  focus  of  a  single  concept. 

At  present  much  Industry  is  conducted,  much  Property  is  ac- 
quired, by  modes  which  are  unjust,  irrational  and  socially  in- 
jurious. Legal  privilege,  economic  force,  natural  or  contrived 
scarcity,  luck,  personal  favour,  inheritance — such  are  the  means 
by  which  large  quantities  of  property  come  to  be  possessed  by 
persons  who  have  not  contributed  any  considerable  productive 
effort  to  their  making. 

Such  property  stands  in  the  eye  of  the  law,  and  in  the  popular 
regard,  upon  precisely  the  same  footing  as  that  owned  by  those 
who  have  earned  it  by  the  sweat  of  their  brow,  or  the  effort  of 
their  brain.  The  failure  of  so  many  thoughtful  men  and  women 
to  appreciate  the  vital  bearing  of  the  issue  of  origins  upon  the 
validity  of  property  is  the  supreme  evidence  of  the  injurious  re- 
actions of  the  present  property  system  upon  the  human  mind. 
The  crucial  moral  fallacy  which  it  evokes  is  the  contention, 
seriously  put  forth  by  certain  social  philosophers,  as  well  as  by 
social  reformers,  that  property  acquired  in  the  ways  I  have  just 
indicated  is  validated  in  reason  and  morality  by  the  good  uses  to 
which  it  may  be  put  by  its  owners.  Mr.  Carnegie  and  Mr. 
Rockefeller  have  seriously  propounded  the  theory  that  certain 


INDIVIDUAL  MOTIVES  TO  SOCIAL  SERVICE       295 

individuals  are  endowed  by  nature  or  by  circumstances  with  the 
opportunity  and  power  of  accumulating  great  wealth,  but  that 
their  wealth,  though  legally  their  private  property,  is  rightly  to 
be  regarded  by  them  as  a  ' social  trust'  to  be  administered  by 
them  for  the  benefit  of  their  fellow-men.  It  seems  to  them  a 
matter  of  indifference  that  this  wealth  is  'unearned,'  provided 
that  it  is  productively  expended.  So  fragments  of  profits,  earned 
by  sweating  labour  or  by  rack  renting  tenants,  are  spent  on  pen- 
sions, public  hospitals  or  housing  reform.  Fractions  of  the  ex- 
cessive prices  the  consuming  public  pays  to  privileged  transport 
companies  or  'protected'  manufacturers  are  given  back  in  parks 
or  universities.  Great  inheritances,  passing  on  the  death  of  rich 
bankers,  contractors  or  company  promoters,  drop  heavy  tears 
of  charity  to  soften  the  fate  of  those  who  have  failed  in  the  busi- 
ness struggle.  Fortunes,  gained  by  setting  nation  against  nation, 
are  applied  to  promote  the  cause  of  international  peace.  This 
humor  is  inevitable.  Unearned  property  can  find  no  social  uses 
more  exigent  than  the  application  of  charitable  remedies  to  the 
very  diseases  to  which  it  owes  its  origin.  So  everywhere  we  find 
the  beneficiaries  of  economic  force,  luck,  favour  and  privilege, 
trying  to  pour  balm  and  oil  into  the  wounds  which  they  have 
made.  The  effect  of  the  process,  and  what  may  be  called  its 
unconscious  intention,  is  to  defend  the  irrationality  and  injustice 
of  these  unearned  properties  by  buying  off  clear  scrutiny  into 
their  origins.  Sometimes,  indeed,  the  intention  attains  a  measure 
of  clear  consciousness,  as  in  the  cases  where  rich  men  or  firms 
regard  the  subscriptions  given  to  public  purposes  as  sound  busi- 
ness expenditure,  applying  one  fraction  of  their  gross  profits  to 
a  propitiation  fund  as  they  apply  another  to  an  insurance  fund. 
§  7.  The  radical  defect  of  this  doctrine  and  practice  of  the 
' social  trust'  is  its  false  severance  of  origin  from  use.  The  organic 
law  of  industry  has  joined  origin  and  use,  work  and  wealth,  pro- 
duction and  consumption.  It  affirms  a  natural  and  necessary 
relation  between  getting  and  spending.  A  man  who  puts  no 
effort  into  getting,  a  rent-receiver,  cannot  put  well-directed 
effort  into  spending.  He  is  by  natural  proclivity  a  wastrel.  A 
man  who  is  purely  selfish  in  his  getting,  as  the  sweater,  gambler, 
or  monopolist,  cannot  be  social  in  his  spending.  The  recipient 


296  WORK  AND  WEALTH 

of  unearned  income  is  impelled  by  the  conditions  of  his  being  to 
a  life  of  idleness  and  luxury:  this  is  the  life  he  is  fitted  for.  He  is 
unfitted  for  the  administration  of  a  social  trust. 

These  obvious  truths,  so  fatally  neglected,  are  no  vague 
maxims  of  revolutionary  ethics,  but  are  firmly  rooted  in  physical 
and  moral  fact.  We  have  seen  that  there  is  throughout  organic 
life  a  quantitative  and  a  qualitative  relation  between  function 
and  nutrition,  each  being  the  condition  of  the  other.  He  who 
does  not  eat  cannot  work:  he  who  does  not  work  cannot  eat. 
It  is  true  that  the  latter  law  works  less  directly  and  less  imme- 
diately than  the  former.  Parasitism,  individual  or  social,  con- 
tinues to  exist  in  many  walks  of  life.  But  it  never  thrives,  it 
always  tends  to  degeneration,  atrophy  and  decay.  Normally, 
and  hi  the  long  run,  it  remains  true  that  'Whosoever  will  not 
work,  neither  can  he  eat.'  If  then  the  recipiency  of  unearned 
wealth,  parasitism,  disables  the  recipient  from  putting  his  'prop- 
erty' to  sound  personal  uses,  is  it  likely  that  he  can  put  it  to 
sound  social  uses?  Though  abnormal  instances  may  seem,  here 
as  elsewhere,  to  contravene  the  natural  law,  it  remains  true  that 
the  power  of  individual  earning,  not  merely  involves  no  power 
of  social  spending,  but  negates  that  power.  It  might  even  be 
contended  that  there  will  be  a  natural  disposition  in  the  recipient 
of  unearned  wealth  to  spend  that  wealth  in  precisely  those  ways 
in  which  it  injures  most  the  society  he  seeks  to  serve.  This  is 
probably  the  case.  It  is  more  socially  injurious  for  the  mil- 
lionaire to  spend  his  surplus  wealth  in  charity  than  in  luxury. 
For  by  spending  it  on  luxury,  he  chiefly  injures  himself  and  his 
immediate  circle,  but  by  spending  it  in  charity  he  inflicts  a 
graver  injury  upon  society.  For  every  act  of  charity,  applied  to 
heal  suffering  arising  from  defective  arrangements  of  society, 
serves  to  weaken  the  personal  springs  of  social  reform,  alike  by 
the  'miraculous'  relief  it  brings  to  the  individual  'case'  that  is 
relieved,  and  by  the  softening  influence  it  exercises  on  the  hearts 
and  heads  of  those  who  witness  it.  It  substitutes  the  idea  and 
the  desire  of  individual  reform  for  those  of  social  reform,  and  so 
weakens  the  capacity  for  collective  self-help  in  society.  The 
most  striking  testimony  to  the  justice  of  this  analysis  is  furnished 
by  the  tendency  of  'model  millionaires'  to  direct  all  their  charity 


INDIVIDUAL  MOTIVES  TO  SOCIAL  SERVICE       297 

to  wholesale  and  what  they  deem  social  purposes,  rather  than  to 
individual  cases.  In  order  to  avoid  the  errors  of  indiscriminate 
charity,  they  fasten  their  munificence  upon  society  in  the  shape 
of  universities,  hospitals,  parks,  libraries  and  other  general 
benefits.  Realising  quite  clearly,  as  they  think,  that  the  char- 
acter of  an  individual  is  weakened  and  demoralised  by  a  charitable 
donation  which  enables  him  to  get  what  otherwise  he  could  only 
have  got  by  his  personal  exertion,  they  proceed  to  weaken  and 
demoralise  whole  cities  and  entire  nations,  by  doing  for  these 
social  bodies  what  they  are  quite  capable  of  doing  for  themselves 
by  their  own  collective  exertions.  These  public  gifts  of  million- 
aires debauch  the  character  of  cities  and  states  more  effectively 
than  the  private  gifts  of  unreflecting  donors  the  character  of 
individuals.  For,  whereas  many,  if  not  most,  of  the  private  re- 
cipients of  charity  are  victims  of  misfortune  or  of  lack  of  oppor- 
tunity, and  are  not  fully  responsible  for  the  evil  plight  in  which 
they  stand,  this  is  not  the  case  with  an  organised  self-governing 
community,  a  City  or  a  State.  Such  a  society  is  able,  out  of  its 
own  resources,  if  it  chooses  to  secure  and  use  them,  to  supply 
for  itself  all  its  own  legitimate  needs.  It  has  a  far  larger  self- 
sufficiency  for  meeting  all  ordinary  emergencies  and  for  following 
an  economy  of  self-development  and  progress,  than  has  the  indi- 
vidual citizen.  For  it  can  supply  its  needs  out  of  the  social  in- 
come which  its  collective  life  is  constantly  assisting  to  produce, 
out  of  that  very  surplus  which,  wrongly  allowed  to  flow,  unearned, 
into  the  coffers  of  rich  individuals,  is  the  very  fund  used  for  this 
debasing  public  charity. 

§  8.  The  clear  recognition  of  these  truths  is  closely  germane  to 
our  central  consideration  in  this  chapter,  viz. ,  the  question  whether 
there  can  be  evoked  in  the  common  consciousness  a  flow  of  true 
social  or  cooperative  feeling  strong  and  steady  enough  to  evoke 
from  individual  citizens  a  sufficient  voluntary  efficiency  in  pro- 
duction. No  absolutely  convincing  answer  to  the  question  is 
at  present  possible.  But,  if  any  such  experiment  is  to  be  tried 
hopefully,  it  can  only  be  done  by  setting  Property  upon  an  in- 
telligible moral  and  social  basis,  so  that  it  passes  into  the  pos- 
session of  him  to  whom  it  is  really  'proper,'  in  the  sense  that  he 
has  put  something  of  himself  into  its  making.  Only  by  resolving 


unearned  Into  earned  income,  so  that  all  Property  is  duly  earned 
either  by  individuals  or  by  societies,  can  an  ethical  basis  be  laid 
for  social  industry.  So  long  as  property  appears  to  come  mirac- 
ulously or  capriciously,  irrespective  of  efforts  or  requirements, 
and  so  long  as  it  is  withheld  as  irrationally,  it  is  idle  to  preach 
'the  dignity  of  labour'  or  to  inculcate  sentiments  of  individual 
self-help. 

When  all  Property  is  visibly  justified,  alike  in  origin  and  use, 
the  rights  of  property  will  for  the  first  time  be  respected,  for  they 
will  be  for  the  first  tune  respectable.  To  steal,  to  cheat,  to 
sweat,  to  cadge  or  beg,  will  be  considered  shameful,  not  because 
the  law  forbids,  but  because  such  acts  will  be  felt  by  all  to  be 
assaults  upon  the  personality  of  another.  For  the  first  time  in 
history,  also,  the  tax-dodger,  the  contractor  who  puts  up  his 
price  for  public  works,  the  sinecurist,  the  jobber,  the  protec- 
tionist and  other  parasites  upon  the  public  purse,  will  receive 
the  general  reprobation  due  to  robbery.  For  when  the  State  is 
recognised  as  having  rights  of  property  identical  in  origin  and 
use  with  those  of  individual  citizens,  that  property  will  claim 
and  may  receive  a  similar  respect.  Property,  in  a  word,  becomes 
a  really  sacred  institution  when  the  human  law  of  distribution  is 
applied  to  the  whole  income,  surplus  as  well  as  costs.  Such 
inequalities  in  income  as  survive  will  be  plainly  justified  as  the 
counterpart  of  inequality  of  efforts  and  of  needs.  The  wide 
contrasts  of  rich  and  poor,  of  luxury  and  penury,  of  idleness 
and  toil,  will  no  longer  stagger  the  reason  and  offend  the 
heart. 

So  the  standard  of  sentimental  values  which  affects  the  con- 
ventional modes  of  living  of  all  classes — largely  by  snobbish 
imitation  and  rivalry — will  be  transformed. 

Ostentatious  waste  and  conspicuous  leisure,  with  all  their 
injurious  reactions  upon  our  Education,  Recreation,  Morals, 
and  Esthetics,  will  tend  to  disappear.  The  illusory  factor  of 
Prestige  will  be  undermined,  so  that  the  valuations,  both  of 
productive  activities  and  of  consumption,  will  shift  towards  a 
natural,  or  rational,  standard. 

§  9.  Not  merely  will  the  wide  gulf  which  severs  mental  from 
manual  workers  disappear,  but  all  the  elaborate  scale  of  values 


INDIVIDUAL  MOTIVES  TO  SOCIAL  SERVICE       299 

for  different  sorts  of  intellectual  and  manual  work  would  undergo 
a  radical  revision. 

The  effect  of  setting  on  a  human  basis  the  industry  of  the 
country  would,  of  course,  react  upon  all  other  departments  of  life, 
Religion,  Family  and  Civic  Morality,  Politics,  Literature,  Art  and 
Science.  For  though  economics  alone  cannot  mould  or  inter- 
pret history,  the  distinctively  economic  institutions  of  Industry 
and  Property  have  always  exercised  a  powerful,  sometimes 
a  dominant  influence,  upon  other  institutions.  The  reforma- 
tion of  economic  life  must,  therefore,  produce  equally  bene- 
ficent effects  upon  all  other  departments — transforming  their 
standards  and  feeding  the  streams  of  their  activities  with  new 
thoughts  and  feelings,  drawn  no  longer  from  the  minds  of  a 
little  class  or  a  few  original  natures,  but  from  the  whole  tide  of 
human  life  flowing  freely  along  every  channel  of  individual  and 
social  endeavour. 

The  security  and  rationality  of  the  economic  order  will  give 
to  all  that  confidence  in  man,  and  that  faith  in  his  future,  which 
are  the  prime  conditions  of  safe  and  rapid  progress.  For  the 
brutal  and  crushing  pressure  of  the  economic  problem  in  its 
coarsest  shape — how  to  secure  a  material  basis  of  livelihood- 
has  of  necessity  hitherto  absorbed  nearly  all  the  energy  of  man, 
so  that  his  powers  of  body,  soul  and  spirit  have  been  mainly 
spent  on  an  unsatisfactory  and  precarious  solution  of  this  per- 
sonal economic  problem.  Religion,  politics,  the  disinterested 
pursuits  of  truth  or  beauty,  have  had  to  live  upon  the  leavings  of 
the  economic  life. 

An  economic  reformation  which,  by  applying  the  human  law 
of  distribution,  absorbs  the  unproductive  surplus,  would  thus 
furnish  a  social  environment  which  was  stronger  and  better  in 
the  nourishment  and  education  it  afforded  to  man.  Every  or- 
gan of  society  would  function  more  effectively,  supplying  richer 
opportunities  for  healthy  all-round  self-development  to  all. 
So  far  as  the  economic  activities  can  be  taken  into  separate 
consideration,  it  is  evident  that  this  justly-ordered  environment 
would  do  much  to  raise  the  physical,  and  more  to  raise  the  moral 
efficiency  of  the  individual  as  a  wealth-producer  and  consumer. 
But  its  most  important  contribution  to  the  value  and  the  growth 


300  WORK  AND  WEALTH 

of  human  welfare  would  lie  in  other  fields  of  personality  than  the 
distinctively  economic,  in  the  liberation,  realisation  and  im- 
proved condition  of  other  intellectual  and  spiritual  energies  at 
present  thwarted  by  or  subordinated  to  industrialism. 


c 

P  U-  P%»»*H«.    CAUI 


CHAPTER  XX 

THE   SOCIAL  WELL  AS  AN  ECONOMIC  FORCE 

§  i.  To  secure  by  education  and  reflection  such  a  revaluation 
of  human  activities,  aims  and  achievements,  as  will  set  economic 
processes  and  products  in  a  definitely  lower  place  than  that 
which  they  occupy  at  present,  is,  I  think,  essential  to  safe  and 
rapid  progress.  For  the  early  steps  towards  a  better  industrial 
order  will  very  likely  involve  some  economic  sacrifice,  in  the  sense 
of  a  reduced  output  of  personal  energy  and  of  wealth-production 
on  the  part  of  the  average  member  of  society.  Although  this 
loss  may  be  more  than  compensated  by  the  elimination  of 
large  wastes  of  competition  and  by  improved  organisation, 
we  are  not  warranted  in  assuming  that  this  will  at  once  take 
place. 

We  need  not  assume  it.  For  even  if  we  do  not,  our  analysis  has 
shown  that  an  economic  system,  thus  working  at  a  lower  rate 
of  human  costs,  and  turning  out  a  smaller  quantity  of  goods,  may 
nevertheless  yield  a  larger  quantity  of  human  welfare,  by  a  better 
distribution  of  work  and  product.  But  the  great  gain,  of  course, 
will  consist  in  the  increased  amount  of  time,  interest  and  energy, 
available  for  the  cultivation  of  other  human  arts  outside  the 
economic  field.  Upon  the  capacity  to  utilise  these  enlarged 
opportunities  the  actual  pace  of  human  progress  in  the  art  of 
living  will  depend.  At  present  this  capacity  may  seem  small. 
The  increased  opportunities  of  leisure,  travel,  recreation,  culture, 
and  comradeship,  which  have  come  hi  widely  different  degrees  to 
all  classes,  have  often  been  put  to  disappointing  uses.  But  a 
great  deal  of  such  waste  is  evidently  attributable  to  that  prevail- 
ing vice  of  thought  and  feeling  which  the  domination  of  industrial- 
ism has  stamped  upon  our  minds,  the  crude  desires  for  physical 
sensations  and  external  display.  Not  until  a  far  larger  measure 
of  release  from  our  economic  bonds  has  been  acquired,  shall  we 

301 


302  WORK  AND  WEALTH 

enjoy  the  detachment  of  mind  requisite  for  the  larger  processes 
of  revaluation  and  realisation. 

§  2.  One  word  remains,  however,  to  be  said  upon  the  all- 
important  subject  of  motives  and  incentives.  We  have  seen 
that,  in  so  far  as  it  is  possible  to  displace  the  competitive  system 
of  industry,  with  its  stimulation  of  individual  greed  and  com- 
bativeness,  by  a  more  consciously  cooperative  system,  the  will 
of  the  individual  engaged  upon  industrial  processes  will  be  af- 
fected in  some  measure  by  the  social  meaning  of  the  work  he 
is  doing,  and  will  desire  to  forward  it.  The  efficacy  of  this  social 
will  is  not,  however,  adequately  realised  so  long  as  it  is  regarded 
merely  as  a  feeling  for  the  public  good  originating  from  a  number 
of  separate  centres  of  enlightened  personality.  The  growing 
recognition  on  the  part  of  individual  workers,  that  the  structure 
of  society  establishes  a  strong  community  of  interests,  will  no 
doubt  supply  some  incentive  to  each  to  do  his  fair  share  to  the 
necessary  work.  But  this  personal  incentive  may  not  go  very 
far  towards  overcoming  the  selfishness  or  sluggishness  of  feebler 
personalities.  If,  then,  the  social  will  be  taken  merely  to  mean 
the  aggregate  of  feeling  for  the  public  good  thus  generated  in  the 
separate  wills,  it  may  not  suffice  to  support  the  commonweal. 
But  if  our  organic  conception  of  society  has  any  validity,  the 
social  will  means  more  than  this  addition  of  separately  stimulated 
individual  wills.  The  individual  soldier  may  have  a  patriotic 
feeling  expressing  his  individual  love  of  his  country,  which  has  a 
certain  fighting  value.  But,  as  his  attachment  to  his  profession 
grows,  another  feeling  of  wider  origin  and  more  enduring  force 
fuses  with  the  narrower  feeling,  enhancing  greatly  its  effective- 
ness. That  feeling  is  esprit  de  corps,  a  corporate  spirit  of  the 
service,  capable  of  overcoming  personal  defects,  the  cowardice, 
apathy  or  greed  of  the  individual,  and  of  evoking  an  enormous 
volume  of  united  effort.  I  have  no  intention  of  suggesting  that 
the  routine  of  ordinary  industry  can  yield  scope  for  displays  of 
this  esprit  de  corps  comparable  in  intensity  with  the  dramatic 
examples  of  great  military  achievements.  But  I  do  affirm  that 
every  conscious  corporate  life  is  accompanied  and  nourished  by 
some  common  consciousness  of  will  and  purpose  which  feeds  and 
fortifies  the  personal  centres,  stimulating  those  that  are  weaker 


THE  SOCIAL  WILL  AS  AN  ECONOMIC  FORCE      303 

and  raising  them  to  a  decent  level  of  effort,  reducing  dissension, 
and  imparting  conscious  unity  of  action  into  complex  processes  of 
cooperation. 

The  power  of  this  social  will  as  an  economic  motive-force  ought 
not  to  be  ignored.  As  the  processes  of  industrial  cooperation 
grow  closer,  more  numerous,  more  regular  in  their  operation, 
this  cooperation  and  coordination,  representing  a  unity  of  will 
and  purpose  far  transcending  the  vision  and  the  purpose  even 
of  the  most  enlightened  and  altruistic  member,  will  form  a 
powerful  current  of  industrial  consciousness,  influencing  and 
moulding  the  will  and  purposes  of  individuals. 

Such  a  force,  emanating  from  the  social  whole,  will  of  necessity 
not  be  clearly  comprehensible  to  the  individuals  who  feel  its 
influence  and  respond  to  it.  They  are  the  many,  while  it  flows 
from  their  union,  which  must  always  be  imperfectly  mirrored 
in  the  mind  of  each.  Yet  this  direct  social  will  only  works  through 
its  power  to  stimulate  and  direct  the  will  of  each,  so  as  to  produce 
a  more  effective  harmony.  Vague  theory  this  will  seem  to  some, 
utterly  remote  from  the  hard  facts  of  life!  The  problem  is  how 
to  induce  public  or  other  salaried  employees  to  do  a  fair  day's 
work,  when  they  might  shirk  it  without  loss  of  pay.  Well,  we 
suggest  that  when  that  fair  day's  work  is  not  unduly  long  or 
onerous,  when  it  is  fairly  paid,  and  when  each  sees  that  all  the 
others  are  called  upon  to  do  their  proper  share,  the  general  sense 
of  fairness  in  the  arrangement  will  come  to  exercise  a  compelling 
influence  on  each  man  to  keep  his  output  up  to  a  decent  level. 
This  power  of  the  social  will  has  never  yet  been  tested.  For  a 
society  with  arrangements  based  on  manifest  principles  of 
justice  and  reason  has  never  yet  been  set  in  operation.  But 
though  our  organic  law  of  distribution  may  never  attain  a  perfect 
application,  so  far  as  it  is  applied  it  may  surely  be  expected  to 
act  in  the  way  here  described,  appealing  to  the  springs  of  honour, 
equity,  comradeship  and  respect  for  public  opinion,  with  a 
force  immeasurably  greater  than  is  possible  in  a  system  of  in- 
dustry and  property  where  reason  and  fair  play  in  the  apportion- 
ment of  work  and  its  rewards  are  so  imperfectly  apparent. 

§  3.  These  conditions  of  organic  welfare  in  the  apportionment 
of  work  and  wealth  do  not  imply  a  conception  of  industrial  soci- 


304  WORK  AND  WEALTH 

ety  in  which  the  individual  and  his  personal  desires  and  ends  are 
impaired  or  sacrificed  to  the  interests  of  the  community.  They 
do  imply  a  growth  of  the  social-economic  structure  in  which  the 
impulses  of  mutual  aid,  which  from  the  earliest  times  have  been 
civilising  mankind,  shall  work  with  a  clearer  consciousness  of 
their  human  value.  As  the  individual  perceives  more  clearly 
how  ultimately  his  personal  efforts  and  effects  are,  in  process  and 
in  product,  linked  with  those  of  all  the  other  members  of  society, 
that  perception  must  powerfully  influence  his  feelings.  He  will 
come  consciously  to  realise  his  personal  freedom  in  actions  that 
are  a  willing  contribution  to  the  common  good.  This  conscious- 
ness will  make  it  more  difficult  for  him  to  defend  in  himself  or 
others  economic  conduct  or  institutions  in  which  individual, 
class  or  national  conflicts  are  involved.  Thus  a  better  social 
consciousness  and  a  better  economic  environment  will  react  on 
one  another  for  further  mutual  betterment.  The  unity  of  this 
social-industrial  life  is  not  a  unity  of  mere  fusion  in  which  the 
individual  virtually  disappears,  but  a  federal  unity  in  which  the 
rights  and  interests  of  the  individual  shall  be  conserved  for  him 
by  the  federation.  The  federal  government,  however,  conserves 
these  individual  rights,  not,  as  the  individualist  maintains,  be- 
cause it  exists  for  no  other  purpose  than  to  do  so.  It  conserves 
them  because  it  also  recognises  that  an  area  of  individual  liberty 
is  conducive  to  the  health  of  the  collective  life.  Its  federal 
nature  rests  on  a  recognition  alike  of  individual  and  social  ends, 
or,  speaking  more  accurately,  of  social  ends  that  are  directly 
attained  by  social  action  and  of  those  that  are  realised  in  in- 
dividuals. I  regard  such  a  federation  as  an  organic  union  because 
none  of  the  individual  rights  or  interests  is  absolute  in  its  sanction. 
Society  in  its  economic  as  in  its  other  relations  is  a  federal  state 
not  a  federation  of  states.  The  rights  and  interests  of  society 
are  paramount:  they  override  all  claims  of  individuals  to  liberties 
that  contravene  them. 

§  4.  So  far  as  industry  is  concerned,  we  perceive  how  this 
harmony  between  individual  and  social  rights  and  interests  is 
realised  in  the  primary  division  of  productive  activities  into  Art 
and  Routine.  The  impulses  and  desires  which  initiate,  sustain 
and  direct  what  we  term  art,  including  all  the  creative  activities 


THE  SOCIAL  WILL  AS  AN  ECONOMIC  FORCE      305 

in  industry,  flow  freely  from  the  individual  nature.  We  recog- 
nise that  productive  activities  in  which  these  elements  are  of 
paramount  importance  form  an  economic  field  which  society, 
guided  by  its  intelligent  self-interest,  will  safely  and  profitably 
leave  to  individuals  and  private  enterprise.  Industries  which 
are  essentially  of  a  routine  character,  affording  little  scope  for 
creative  activities  of  individuals,  must  pass  under  direct  social 
administration.  For  free  individual  initiative  and  desires  will 
not  support  them.  They  can  only  be  worked  under  private 
enterprise  on  condition  that  great  gains  are  procurable  for  the 
entrepreneurs  and  an  unfree  body  of  proletarian  labour  is  available 
for  compulsory  service.  The  routine  services  of  society  cannot 
properly  be  secured  by  appeals  to  the  separate  self-interests  of 
individuals.  So  administered,  they  involve  the  waste  of  vast 
unearned  gains  accruing  to  a  private  caste  of  masters,  the  injury 
and  degradation  of  economic  servitude  in  the  workers,  and  a 
growing  insecurity  and  irregularity  of  service  to  the  consumers. 
The  only  volume  of  free-will  and  voluntary  enterprise  that  can 
support  those  routine  industries  is  the  free-will  and  enterprise 
of  Society.  If  we  can  bring  ourselves  to  regard  the  great  normal 
currents  of  routine  industry,  engaged  in  supplying  the  common 
daily  needs,  from  the  standpoint  of  a  real  live  Society,  we  shall 
recognise  that  to  that  Society  this  industrial  activity  and  its 
achievements  are  full  of  interest  and  variety.  What  to  the  in- 
dividual is  dull  routine  is  to  Society  creative  art,  the  natural  em- 
ployment of  social  productive  energies  for  the  progressive  satis- 
faction of  social  needs.  Though  the  individual  will  soon  flags 
before  demands  for  work  so  irksome  and  repellent  to  its  nature, 
the  social  will  gladly  responds  to  work  in  which  that  will  finds 
its  free  natural  expression. 

This  is  the  ultimate  argument  in  favour  of  the  socialisation 
of  the  routine  industries,  viz.,  the  release  of  the  individual  will 
from  work  that  is  costly,  repellent  and  ill-done,  in  order  to  enable 
the  social  will  to  find  in  that  work  its  healthy,  interesting,  educa- 
tive self-realisation.  For  once  conceive  Society  as  a  being  capable 
of  thought  and  feeling,  these  processes  have  an  interest  for  it. 
They  are  social  art,  part  of  the  collective  life  in  which  Society 
realises  itself,  just  as  the  individual  realises  himself  in  individual 


306  WORK  AND  WEALTH 

art.  Once  accept  the  view  of  Society  not  as  a  mere  set  of  social 
institutions,  or  a  network  of  relations,  but  as  a  collective  per- 
sonality, the  great  routine  industrial  processes  become  the  vital 
functions  of  this  collective  being,  interesting  to  that  being  alike 
in  their  performance  and  their  product.  That  subdivision  of 
labour  and  that  apparent  contradiction  of  interests  between 
producer  and  consumer  which  seem  designed  to  feed  personal 
antagonisms  and  to  thwart  individuality,  now  acquire  rational 
justification  as  the  complex  adaptive  play  of  healthy  vital  func- 
tions in  Society. 

§  5.  Labour,  thus  interpreted,  becomes  a  truly  social  function, 
the  orderly  half -instinctive  half -rational  activity  by  which  society 
helps  itself  and  satisfies  its  wants,  a  common  tide  of  productive 
energy  which  pulses  through  the  veins  of  humanity,  impelling 
the  individual  members  of  society  to  perform  their  part  as  con- 
tributors to  the  general  life.  Whether  those  individual  actions 
are  strictly  voluntary,  pleasurable  and  interesting  in  themselves 
to  those  who  perform  them,  as  in  the  finer  arts,  or  are  compulsory 
hi  their  main  incidence  upon  the  individual,  and  accompanied 
by  little  interest  or  social  feeling  on  his  part,  is  a  matter  of  quite 
secondary  importance  as  viewed  from  the  social  standpoint.  As 
labour  is  social,  so  is  capital.  The  other  apparent  discrepancy, 
that  between  the  interests  of  present  and  future,  spending  and 
saving,  also  disappears  when  we  consider  the  social  signific- 
ance of  saving.  For  society  secretes  capital  by  the  same  half- 
instinctive  half-rational  process  by  which  it  generates,  directs 
and  distributes,  its  supply  of  labour.  Only  by  a  hypothesis 
which  thus  assigns  a  central  industrial  purpose  to  society  can 
we  possibly  understand  the  life  of  industry  and  the  complex 
cooperation  it  displays. 

Take  for  a  single  instance  the  wheat  supply  of  the  world — or 
the  cotton  industry  of  Lancashire.  We  see  large  rhythmic 
actions,  elaborate  in  their  complicated  flows,  responsive  to 
innumerable  stimuli  of  world-markets, — a  nervous  system  of 
affluent  and  effluent  currents,  directed  by  the  desires  and  beliefs 
of  innumerable  producers  and  consumers,  each  consciously 
actuated  by  his  own  particular  motives  and  yet  cooperating 
towards  large  social  ends. 


THE  SOCIAL  WILL  AS  AN  ECONOMIC  FORCE      307 

We  can  neither  grasp,  intellectually  or  emotionally,  the  human 
or  social  significance  of  these  processes,  if  we  persist  in  resolving 
them  into  the  ideas,  feelings  and  actions  of  individual  persons. 
The  harmony  becomes  either  fortuitous  or  purely  mystical. 
But,  if  we  regard  Society  as  having  a  large  life  of  its  own,  the 
cooperative  harmony  of  individual  aims  and  activities  becomes 
a  corporate  organic  process.  The  social  life  does  not  suffer  from 
division  of  labour  and  specialisation  of  function,  but  gains,  as  in 
the  animal  organism.  The  social  life  is  not  oppressed,  degraded 
or  injured  by  the  routine  of  the  smaller  working  lives,  any  more 
than  the  animal  organism  by  the  regularity  and  repetition  of  the 
respiratory,  circulating  and  other  routine  operations  of  its  organs 
and  their  cells. 

§  6.  "But,"  it  will  be  objected,  "even  if  we  are  justified  in 
pushing  the  organic  analogy  so  far  as  to  claim  the  existence  of  a 
real  social  life  with  a  meaning  and  end  of  its  own,  superior  to 
that  of  the  individual,  as  the  life  of  every  organism  is  superior  to 
that  of  its  organs  and  cells,  that  larger  social  being  can  only  re- 
main a  shadowy  or  hypothetical  being  to  actual  men  and  women. 
And  it  is  the  aims,  ideas,  feelings  and  activities  of  these  little 
units  that,  after  all,  will  always  absorb  our  attention  and  occupy 
our  hearts  and  minds." 

Here  is  the  final  quintessence  of  individualism  surviving  hi 
many  professing  socialists,  the  denial  of  the  existence  of  a  ra- 
tional moral  society.  Yet  such  a  society  exists.  The  earliest 
beginnings  of  animal  gregariousness,  sexual  feelings,  and  other 
primary  instincts  of  association,  with  the  mutual  aid  they  give 
rise  to,  are  a  first  testimony  to  the  existence,  even  at  the  open- 
ing of  the  human  era,  of  a  real  though  rudimentary  society, 
physical  and  psychical  in  its  nature.  Civilisation  has  its  chief 
meaning  in  the  extension  and  growing  realisation  of  this  unity 
of  Society,  by  utilising  these  secret  threads  of  social  feeling  for 
the  weaving  of  the  fabric  of  social  institutions.  Thus,  through 
these  instruments  of  common  social  life,  language,  art,  science, 
industry,  politics,  religion,  society  gathers  a  larger,  more  solid 
and  various  life.  Race,  Nationality,  Church,  the  bond  of  some 
common  interest  in  a  science,  an  art,  a  philanthropic  purpose, 
often  present  intense  examples  of  genuinely  common  life  and 


3o8  WORK  AND  WEALTH 

purpose.  These  are  not  mere  social  contracts  of  free  individuals, 
seeking  by  cooperation  to  forward  their  individual  ends.  Such 
a  conception  of  mutual  aid  is  as  false  for  religion,  science,  art  or 
industry,  as  for  politics.  The  statement  that  'man  is  a  social 
animal'  cannot  merely  signify  that  among  man's  equipment  of 
feelings  and  ideas  there  exists  a  feeling  and  idea  of  sympathy 
with  other  men.  That  is  only  how  it  looks  from  ilie  standpoint  of 
the  cell.  It  means  that  humanity  in  all  its  various  aggregations  is 
a  social  stuff,  and  that  whatever  forms  of  coalescence  it  assumes, 
i.  e.  a  nation,  caste,  church,  party,  etc.,  there  will  exist  a  genuinely 
organic  unity,  a  central  or  general  life,  strong  or  weak,  but,  so  far 
as  it  goes,  to  be  considered  as  distinct  from  and  dominant  over 
the  life  and  aim  of  its  members. 

This  central  life,  though  distinguishable  from  the  lives  of  its 
members,  as  an  object  of  thought  and  will,  is  yet  only  lived  in 
and  through  the  life  of  the  organs  and  cells.  This  is  the  subtle 
nature  of  the  organic  bond. 

We  are  told  indeed  that  "Society  only  exists  in  individuals." 
This,  however,  is  only  true  in  the  same  restricted  sense  in  which 
it  is  true  that  an  animal  organism  only  exists  in  the  life  of  its 
cells.  There  is  nothing  but  the  cells  plus  their  organic  coopera- 
tion. But  I  should  rather  say  that  the  organism  exists  in  the 
cooperation  of  the  cells.  So  I  should  say  that  Society  exists  in 
the  cooperation  of  individuals. 

This  is  not  a  matter  of  theoretic  accuracy  of  statement,  but  of 
immense  practical  significance.  For  the  future  progress  of  the 
arts  of  social  conduct,  especially  of  industry  and  politics,  must 
largely  depend  upon  the  measure  and  manner  of  acceptance  of 
this  view  of  the  nature  of  Society.  It  must,  indeed,  to  the  in- 
dividual mind  always  remain  as  a  hypothesis,  incapable  of  full 
and  exact  verification.  For  such  verification  would  imply  an 
absolute  merging  of  individual  personality  in  the  social  unity. 
Such  a  public  spirit  can  never  absorb  and  displace  private  spirits. 
But  the  hypothesis  may,  for  all  that,  possess  both  intellectual 
and  emotional  validity.  Its  clear  provisional  acceptance  will 
not  only  explain  many  of  the  difficulties  and  reconcile  many  of 
the  discrepancies  in  those  tendencies,  industrial  and  political, 
which  are  generally  accepted  as  making  for  human  progress,  but 


THE  SOCIAL  WILL  AS  AN  ECONOMIC  FORCE      309 

will  afford  increased  economy  of  direction  and  of  motive.  For 
once  let  us  realise  Society  as  possessing  a  unity  and  a  life  of  its 
own,  to  the  furtherance  of  which  each  of  us  contributes  in  the 
pursuance  of  the  particular  life  we  call  'our  own,'  the  so-called 
sacrifices  we  are  called  upon  to  make  for  that  larger  life  will  be 
considered  no  longer  encroachments  on  but  enlargements  of  our 
personality.  We  shall  come  in  larger  measure  to  identify  our 
aims  and  ends  willingly  with  the  aims  and  ends  we  impute  to 
society,  and  every  step  in  that  public  conduct  will  enrich  or 
strengthen  that  social  sympathy  which  we  shall  recognise  to  be 
the  very  life  of  society  flowing  in  our  veins.  This  is  the  spirit 
of  social  reform,  as  distinguished  from  the  concrete  measures  of 
reform.  Upon  the  creation  and  recognition  of  this  spirit  the 
possibility,  the  usefulness,  the  durability  of  every  one  of  the 
institutions  and  policies,  which  are  evolved  by  modern  civili- 
sation, depend.  It  is,  therefore,  of  supreme  and  critical  impor- 
tance to  obtain  the  widest  possible  acceptance  of  the  conception 
of  Society  as  a  living  being  to  which  each  of  us  '  belongs, '  a  being 
capable  of  thinking  and  feeling  through  us  for  itself,  and  of  de- 
siring, pursuing  and  attaining  ends  which  are  its  ends,  and  which 
we  are  capable  of  helping  to  realise.  So  long  as  Society  is  spoken 
of  and  thought  of  as  an  abstraction,  no  social  conduct  can  be 
sound  or  safe.  For  an  abstraction  is  incapable  of  calling  forth 
our  reverence,  regard  or  love.  And  until  we  attribute  to  Society 
such  a  form  and  degree  of  'personality'  as  can  evoke  in  us  those 
interests  and  emotions  which  personality  alone  can  win,  the 
social  will  will  not  be  able  to  perform  great  works. 

The  final  claim  we  make  for  the  human  valuation  of  industry 
presented  here  is  that  it  helps  to  bring  into  clear  relief  a  set  of 
human  problems  which,  from  the  conception  of  society  as  a  mere 
arrangement  for  securing  individual  ends,  are  perceived  to  be 
insoluble,  but  for  which  reason  and  emotion  alike  demand  a 
satisfactory  solution.  Only  by  substituting  for  the  attainment 
of  individual  welfare  the  ideal  and  the  standard  of  social  welfare, 
are  we  able  to  obtain  a  method  of  analysis  and  valuation  which 
furnishes  satisfactory  solutions  to  the  problems  that  industry 
presents. 


CHAPTER  XXI 

PERSONAL  AND  SOCIAL  EFFICIENCY 

§  i.  What  light  does  our  human  valuation  of  economic  pro- 
cesses throw  upon  the  conditions  of  individual  and  social  pro- 
gress? Our  examination  of  industry  has  shown  us  the  ways  in 
which  the  actual  production  and  consumption  of  wealth  affect 
the  personal  efficiency  and  welfare  of  individuals.  The  organic 
law  of  distribution  clearly  indicates  personal  efficiency,  alike  for 
purposes  of  economic  productivity  and  for  the  wider  art  of  life,  to 
depend  primarily  upon  the  maintenance  of  sound  relations  be- 
tween the  output  of  economic  activities  and  the  income  of  eco- 
nomic satisfactions.  A  healthy  system  of  industry  will  demand 
from  each  producer  an  amount  and  kind  of  'costly'  labour  accom- 
modated to  his  natural  and  acquired  powers.  By  such  a  distribu- 
tion of  the  socially  useful  work  which  is  not  in  itself  agreeable  to 
its  performers,  the  common  economic  needs  of  society  are  supplied 
with  the  smallest  aggregate  amount  of  human  cost.  Similarly,  we 
see  how,  by  a  distribution  of  wealth  according  to  the  needs  of  each 
member,  i.  e.  according  to  his  'power'  as  consumer,  the  largest 
aggregate  amount  of  human  utility  is  got  out  of  the  wealth  dis- 
tributed. 

But  this  burden  of  'costly'  work,  required  of  the  producer  and 
adjusted  to  his  powers,  is  not  the  only  work  that  he  can  do.  The 
main  object  of  the  shorter  work-day  and  the  better  apportion- 
ment of  'costly'  labour,  as  we  have  already  recognised,  is  to  lib- 
erate the  individual  so  that  he  has  time  and  energy  for  the  volun- 
tary performance  of  'productive'  activities  that  are  'costless,' 
interesting  and  beneficial  to  his  personal  life.  Some  of  these 
voluntary  activities  will  be  'economic'  in  the  sense  that  they  may 
produce  goods  or  services  which  have  an  exchange  value.  Such 
is  the  gardening  or  the  wood-carving  which  a  man  may  do  in  his 
spare  time.  Though  it  may  bring  him  a  direct  return  of  per- 
sonal gain  and  satisfaction  that  is  non-economic,  it  may  also  be 

310 


PERSONAL  AND  SOCIAL  EFFICIENCY  311 

a  supplementary  means  of  income.  There  is  no  reason  why  a 
man  whose  hobby  is  his  garden  should  not  be  able  to  exchange 
some  of  the  fruit  and  flowers,  which  it  has  been  a  pleasure  for 
for  him  to  grow,  for  the  photographs  or  the  book-bindings  on 
which  his  neighbours  may  prefer  to  spend  a  portion  of  their 
leisure.  Most  of  the  spare  energy  or  leisure,  however,  won  for 
the  worker  by  a  fair  distribution  of  'costly'  labour,  will,  of  course, 
usually  be  applied  to  personal  employments,  to  the  arts  of  home 
life  and  of  society,  which,  though  highly  conducive  to  personal 
efficiency,  lie  outside  the  range  of  'economics.'  Each  person 
would  apply  this  free  time  and  energy  differently,  his  voluntary 
work  having  some  natural  relation  as  'relief  or  'variety'  to  the 
sort  of  'costly'  or  routine  labour  which  earned  his  livelihood. 
Thus  on  this  true  equalitarian  basis  there  would  arise  an  immense 
variety  of  freely  active  personalities.  Each  person  would  have 
what  may  be  called  a  personal  standard  of  production,  an  orderly 
application  of  his  productive  energies,  which,  though  partly  im- 
posed by  his  status  as  a  member  of  society  bound  to  do  his  share 
in  social  work,  would  largely  represent  his  personal  tastes,  choices 
and  interests,  selfish  or  altruistic,  according  to  his  temperament. 
§  2.  Turning  to  the  other  side  of  industry,  the  distribution  of 
wealth  to  each  according  to  his  needs,  i.  e.  capacities  of  use,  per- 
sonality would  impress  itself  similarly  upon  an  immense  variety 
of  actual  standards  of  consumption,  or  modes  of  applying  in- 
come to  the  satisfaction  of  desires.  There  is,  however,  an  im- 
portant distinction  to  be  noted  between  standards  of  consump- 
tion and  of  production.  Whereas  in  modern  industry  the  earning 
of  income  is  normally  an  individual  art,  its  consumption  is  nor- 
mally a  family  act.  While  the  family,  except  in  some  agricultural 
societies,  is  very  rarely  a  unit  of  production,  it  remains  usually  a 
unit  of  consumption.  It  would  appear,  then,  that  our  human 
distribution  would  affect  personal  efficiency  differently  upon  the 
two  sides  of  its  application.  As  producer  his  standard  of  pro- 
duction, or  of  use  of  productive  activities,  would  appear  to  be 
directed  by  a  balance  between  the  social  requirements  of  labour 
and  his  personal  proclivities,  whereas  on  the  side  of  consumption 
the  balance  would  be  between  the  social  requirements  and  the 
family.  Society  must  secure  for  the  standard  of  family  comfort 


3i2  WORK  AND  WEALTH 

such  an  expenditure  as  will  sustain  the  working  numbers  of  the 
family  in  full  economic  efficiency,  i.  e.  a  proper  economy  of  what 
the  classical  economists  called  'productive  consumption'  must 
take  place.  But,  outside  this  limit,  the  particular  requirements 
and  conditions,  not  of  the  earner  alone,  but  of  the  family  as  a 
whole,  must  determine  the  expenditure  that  makes  for  efficiency. 
This  discrepancy,  however,  is  not  really  so  great  as  it  appears 
at  first  sight.  The  direct  interest  of  society  in  the  productive  and 
consumptive  life  of  its  individual  members  lies  in  their  perform- 
ance of  this  proper  share  of  'costly'  or  social  service  and  their 
use  of  a  proper  portion  of  their  income  for  consumption  adjusted 
to  maintain  their  efficiency  for  this  social  service.  The  rest  of 
their  productive  energy,  the  rest  of  their  consumptive  wealth,  lie 
under  their  own  control  for  their  personal  life.  The  fact  that  this 
personal  life  may  be  more  narrowly  personal  on  the  productive 
side,  more  of  a  family  life  on  the  consumptive  side,  does  not 
seriously  affect  the  issue.  Indeed,  the  discrepancy  almost  wholly 
disappears  when  we  look  a  little  closer  at  the  liberties  which  a 
better  social  economy  of  production  secures  for  the  worker.  The 
better  life  which  a  slackening  of  the  industrial  strain  will  bring  to 
the  producer  will  consist  in  the  cultivation  of  interests  and  activi- 
ties which,  precisely  because  they  are  voluntary  and  in  them- 
selves desired,  cannot  rightly  be  classified  as  either  production  or 
consumption  but  unite  the  qualities  of  both.  We  have  seen  that 
this  is  the  characteristic  of  all  art,  or  all  work  which  is  good  and 
pleasant  in  itself.  Any  activity  that  carries  a  surplus  of  human 
utility  over  human  cost  is  at  once  function  and  nutrition,  produc- 
tion and  consumption.  In  a  word,  it  is  an  increase  of  life.  So  it 
comes  about  that  the  'human  distribution'  feeds  personal  effi- 
ciency equally  on  its  productive  and  consumptive  sides.  A 
healthy  application  of  productive  activities  will  contribute  as 
much  to  individual  progress  as  a  healthy  standard  of  consump- 
tion. 

§  3.  It  remains  to  recognise  that  the  organic  treatment  of  our 
problem  does  not  permit  society  to  adopt  a  separatist  view  of  the 
distribution  of  work  and  its  product.  A  distribution  of  work  'ac- 
cording to  the  powers '  of  workers  is  conceivable  on  terms  which 
would  cause  heavy  damage  to  society  through  ignoring  the  reac- 


PERSONAL  AND  SOCIAL  EFFICIENCY  313 

tions  of  work  upon  consumption.  It  might  appear  superficially 
a  sound  human  economy  to  place  all  the  burden  of  the  heaviest 
and  most  repellent  muscular  toil  upon  classes  or  races  of  men 
whose  powerful  bodies  and  insensitive  minds  seemed  to  indicate 
that  they  were  best  fitted  by  nature  for  such  work.1  But  if  the 
effect  of  such  an  economy  were,  as  it  would  be,  to  keep  consider- 
able bodies  of  population  in  a  low  grade  of  animalism,  as  repre- 
sented in  coarse  modes  of  living  and  brutal  recreations,  this  one- 
sided view,  by  neglecting  these  organic  reactions,  would  injure 
the  personality  of  these  lower  grades  of  citizens,  and  through 
them  damage  the  efficiency  of  the  society  of  which  they  were 
members.  Or,  taking  an  opposite  instance,  a  Society  which  en- 
abled classes  of  artistic  or  literary  folk  to  escape  all  share  of 
'costly'  social  labour,  so  as  to  cultivate  exclusively  their  indi- 
vidual activities  and  tastes,  would  incur  a  similar  social  danger 
through  the  presence  of  highly  stimulating  personalities,  un- 
checked by  any  adequate  sense  of  social  responsibilities,  who  by 
their  example  and  influence  might  undermine  the  routine  activi- 
ties which  are  the  feeders  of  social  life. 

So  far,  then,  as  economic  reforms  are  aiming  at  personal 
efficiency,  they  must  take  simultaneously  into  consideration  the 
effects  which  each  reform  will  have  upon  the  production  and  the 
consumption  of  wealth.  For  example,  a  shortening  of  the  work- 
day ought  to  be  accompanied  by  improved  opportunities  of  edu- 
cation and  of  recreation  as  an  integral  part  of  the  reform. 

§  4.  Our  setting  of  the  problem,  which  brings  into  contrast  the 
routine  social  production  that  is  'costly'  to  individuals  and  the 
creative  or  individual  production  which  is  '  costless, '  might  seem 
to  involve  the  view  that  social  progress,  as  distinct  from  indi- 
vidual, would  involve  an  increasing  total  burden  of  routine  work 
under  direct  social  control.  Thus  an  antagonism  between  the 
conscious  interests  of  the  individual  and  the  social  interests  might 
appear  to  remain.  For,  though  a  better  social  will,  operating 
upon  the  individual,  might  dispose  him  to  accept  his  duty  of 
serving  society  in  the  performance  of  his  share  of  routine  work,  it 

1  Ruskin  had  a  curious  notion  of  this  sort  (cf.  Time  and  Tide,  par.  107,  Munera 
Puheris,  par.  109,  Fors  Clavigera,  Letter  Ixxxii),  and  the  recent  American  'Scientific 
Management'  appears  to  endorse  it. 


3i4  WORK  AND  WEALTH 

would  still  be  true  that  such  service  was  less  desirable  to  him  and 
less  nourished  his  personal  life  than  the  free  personal  activities 
upon  which  it  encroached.  This  opens  up  an  exceedingly  import- 
ant issue  in  social  economy.  It  has  been  assumed  that  a  really 
enlightened  society  will  so  administer  industry  that  a  light  day's 
labour  shared  among  all  will  suffice  to  win  the  wealth  necessary 
for  the  support  of  society  and  the  satisfaction  of  the  common 
material  needs  of  its  members.  Thus  an  increasing  proportion  of 
human  energy  will  be  liberated  for  the  performance  of  those 
activities  which  are  pleasant  and  interesting  to  those  who  engage 
in  them.  A  diminishing  amount  of  time  and  energy  will  be  ap- 
plied to  the  mechanical  processes  of  getting  food  and  other  ma- 
terials from  the  earth,  and  of  fashioning  them  and  carrying  them 
about.  Thus  there  will  be  more  time  and  energy  for  the  fine 
arts  and  crafts,  which  depend  less  upon  quantity  of  materials  and 
more  upon  the  skilled  application  of  personal  powers.  From  the 
standpoint  of  human  welfare  such  an  economy  is  obvious.  It 
means,  on  the  productive  side,  a  progressive  increase  of  activity 
that  is  humanly  'costless'  and  pleasurable,  a  progressive  de- 
crease of  that  which  is  costly  and  unpleasurable.  On  the  con- 
sumptive side,  it  means  the  substitution  of  non-material  wealth, 
such  as  books,  pictures,  poetry,  science,  which  are  virtually  in- 
finite in  the  human  utility  that  they  are  capable  of  yielding,  for 
material  wealth  which  is  mostly  consumed  in  a  single  act  of  appro- 
priation. The  higher  kind  of  goods  thus  brings  a  minimum  of 
costs  and  a  maximum  of  utilities,  and  that  upon  each  side  of  the 
organic  equation. 

In  most  advanced  nations  of  our  time  this  gain  in  the  relative 
importance  of  the  arts  and  professions  engaged  in  artistic,  pro- 
fessional, recreative,  educational,  scientific  and  other  creative 
activities,  is  recognised  as  being  an  evidence  and  a  measure  of 
advancing  civilisation,  and  some  offset  to  the  advance  of  material 
luxury. 

§  5.  If,  however,  there  is  to  be  a  continuous  increase  in  the 
proportion  of  time  and  energy  available  for  the  production  and 
consumption  of  the  higher  grades  of  non-material  economic  goods 
and  for  other  activities  of  a  non-economic  nature,  some  limitation 
must  take  place  of  the  demand  and  supply  of  material  economic 


PERSONAL  AND  SOCIAL  EFFICIENCY  315 

goods.  If  in  any  country,  or  throughout  the  industrial  world, 
the  growth  of  population  were  such  as,  in  the  old  phrase,  to  press 
'  upon  the  means  of  subsistence, '  the  amount  of  productive  energy 
needed  for  the  arts  of  agriculture,  mining,  and  the  staple  branches 
of  manufacture  and  transport  would  be  such  as  to  defeat  the 
economy  of  social  progress  just  indicated.  Even  if  the  popula- 
tion did  not  advance,  but  were  chiefly  engaged  in  seeking  fuller 
satisfaction  of  an  increasing  number  of  distinctively  physical 
wants,  the  same  result  would  follow.  Larger  drafts  must  con- 
tinually be  made  upon  the  natural  resources  of  the  soil,  by  means 
of  industries  subject  to  what  political  economy  calls  "the  law 
of  diminishing  returns, "  and  an  increasing  proportion  of  labour 
must  be  engaged  in  these  industries.  Though  mechanics  and  the 
division  of  labour  in  the  manufactures,  and  even  in  agriculture, 
temper  the  tyranny  of  matter,  enabling  a  given  amount  of  rou- 
tine toil  to  achieve  an  increasing  output  of  goods,  this  policy  of 
human  liberation  is  impeded  and  may  be  entirely  frustrated  by 
a  constant  preference  among  large  populations  for  a  strictly  quan- 
titative satisfaction  of  new  material  wants.  The  root  issue  of 
social  progress  from  the  economic  standpoint  is  here  disclosed. 
It  is  the  question  of  the  relative  importance  of  quantity  of  matter 
in  the  satisfaction  of  wants.  In  urging  that  social  progress  re- 
quires a  progressive  diminution  of  the  part  played  by  matter 
and  the  industries  in  which  quantity  of  matter  is  a  chief  deter- 
minant factor,  I  do  not  merely  mean  that  civilisation  implies  an 
increasing  valuation  of  the  intellectual  and  moral  faculties  and  of 
their  activities.  Most  of  the  fine  arts  require  some  matter  for 
their  manipulation  and  for  their  instruments;  every  branch  of  the 
intellectual  life  needs  some  material  equipment.  But  in  these 
occupations  and  in  their  products  quantity  of  matter  is  of  an  im- 
portance that  is  slight,  often  wholly  negligible.  A  fine  art,  a 
skilled  craft,  a  machine  industry,  may  each  handle  the  same  sort 
of  material,  metal,  stone  or  wood,  but  the  quantity  of  this  mate- 
rial will  have  a  rapidly  increasing  importance,  as  one  descends 
from  the  manipulation  of  the  artist  to  the  craftsman  and  from  the 
craftsman  to  the  manufacturer. 

If,  then,  we  are  to  secure  an  economy  of  social  progress  in  which 
relatively  less  importance  is  to  be  given  to  those  industries  which 


3i6  WORK  AND  WEALTH 

are  less  humanly  desirable,  alike  in  the  work  they  involve  and  in 
the  satisfaction  their  products  yield,  we  must  have  a  society 
which  becomes  increasingly  qualitative  in  its  tastes  and  interests 
and  in  its  human  constitution.  A  larger  proportion  of  its  real 
income  must  take  shape  in  non-material  goods,  or  in  material 
goods  which  depend  more  for  the  satisfaction  they  yield  upon 
their  quality.  In  a  word,  there  must  be  a  tendency  to  keep  life 
simple  in  regard  to  material  consumption. 

But  when  one  says  that  society  itself  must  grow  more  qualita- 
tive in  its  constitution,  a  more  difficult  consideration  emerges. 
In  the  discussion  regarding  the  bearing  of  the  growth  of  popula- 
tion upon  general  welfare  too  much  attention  was  formerly  ac- 
corded to  the  merely  quantitative  question.  Too  little  is  now 
accorded.  Under  the  title  of  eugenics  the  population  question 
threatens  to  become  entirely  qualitative.  Now  this  is  evidently  a 
mistake.  For  whatever  interpretation  we  accord  to  social  welfare, 
some  consideration  as  to  the  desirable  number  and  rate  of  growth 
of  the  population  is  evidently  of  importance.  Though  it  may  be 
agreed  that  vital  values  in  their  spiritual  and  even  in  the  physi- 
cal meanings  are  distinctly  qualitative,  and  that,  as  far  as  pos- 
sible, a  society  should  set  itself  to  maintain  conditions  of  sex  se- 
lection favourable  to  admittedly  finer  and  healthier  types,  this 
issue  of  quality  must  not  be  detached  from  the  issue  of  quantity. 
As  in  the  economy  of  the  individual  life  a  proper  allowance  of  at- 
tention must  be  secured  for  physical  wants  and  for  the  material 
production  and  consumption  they  involve,  so  in  a  society  the  size 
of  its  physical  structure,  the  number  of  cooperating  human  cells 
through  which  it  lives,  is  a  consideration  that  inheres  in  the  art 
of  social  life.  Ruskin  was  surely  right  in  his  general  setting  of  the 
social  question  'How  can  society  consciously  order  the  lives  of 
its  members  so  as  to  maintain  the  largest  number  of  noble  and 
happy  human  beings?'1  How  much  consciousness  or  calculation 
can  advantageously  be  brought  to  bear  upon  the  regulation  of  the 
play  of  the  sexual  and  related  instincts  and  desires,  is  a  highly 
controversial  question  into  which  we  need  not  enter  here.  But 
so  far  as  social  reform  can  make  good  any  claim  to  regulate  the 
growth  of  the  population,  its  regulation  should  clearly  have  re- 
1  Time  and  Tide,  par.  123. 


PERSONAL  AND  SOCIAL  EFFICIENCY  317 

gard  to  quantity  as  well  as  quality.  A  large  number  of  physi- 
cally sound  and  happy  human  beings  must  be  taken  as  a  prime 
condition  of  social  welfare.  It  is  not  easy  to  defend  the  prosper- 
ity of  a  people  who  shall  seem  to  purchase  a  fuller  and  even  a 
more  spiritually  complex  life  for  some  or  all  their  members  by  a 
continuous  reduction  of  their  numbers.  Where  life  is  valued  and 
valuable  the  natural  disposition  to  extend  its  values  as  widely  as 
is  consistent  with  their  maintenance  is  a  natural  instinct  difficult 
to  impugn.  If  it  be  contended  that  this  is  in  some  sense  an  ad- 
mission of  the  social  validity  of  the  tendency  to  multiply  so  as  to 
'press  on  the  means  of  subsistence,'  I  might  admit  the  interpre- 
tation, provided  it  were  understood  that  'means  of  subsistence' 
included  all  the  essentials  of  spiritual  as  well  as  of  physical  life. 
I  do  not,  however,  wish  to  dogmatise  upon  a  difficult  and  exceed- 
ingly debateable  matter,  but  only  to  insist  that  a  conscious  art  of 
social  progress  can  no  more  ignore  quantity  than  quality  of  popu- 
lation in  any  general  calculus  of  human  welfare. 

§  6.  The  greater  equalisation  of  incomes  which  would  follow 
from  the  absorption  of  unproductive  surplus  into  public  income 
and  into  remuneration  of  labour,  would  be  favourable  to  the  two 
conditions  of  social  progress  here  laid  down,  a  restriction  upon 
the  growth  of  material  consumption  and  a  reasonable  regulation 
of  the  growth  of  population.  For,  as  luxury  and  material  waste 
are  seen  largely  to  arise  as  instruments  for  the  display  of  individ- 
ual prowess  in  competitive  industry,  the  removal  of  that  compe- 
tition from  fields  which  yield  large  means  for  such  display  would 
necessarily  quench  the  zest  which  it  exhibits,  as  well  as  stop  the 
sources  of  such  extravagant  expenditure.  For  when  profuse  dis- 
play of  material  apparatus  is  no  longer  possible,  the  natural  de- 
sire for  personal  distinction,  which  is  the  deepest-rooted  of  all  per- 
sonal desires,  will  tend  more  and  more  to  find  expression  in  those 
arts  of  refined  living  which  are  more  truly  personal  in  that  they 
cause  the  more  intellectual  and  spiritual  qualities  of  personality 
to  shine  forth.  If,  for  the  quantitative  display  of  material 
goods,  there  can  gradually  be  substituted  a  qualitative  dis- 
play of  spiritual  goods,  this  change  will  be  attended  by  a  cor- 
responding change  in  economic  activities.  There  will  be  a  re- 
duction in  the  coarser  forms  of  productive  energy  making  large 


3i8  WORK  AND  WEALTH 

drafts  upon  the  material  resources  of  nature,  and  an  increase  of 
the  higher  forms  of  energy  whose  drafts  on  these  material  re- 
sources are  relatively  small. 

The  proportion  of  non-material  to  material  wealth  will  increase, 
and  there  will  be  a  corresponding  increase  in  the  proportion  of 
productive  activities  that  contain  large  factors  of  creative  in- 
terest. Every  enlargement  of  the  scope  for  free  individual  ex- 
pression through  economic  demand,  even  for  purely  material 
goods,  will  have  a  necessary  effect  in  curbing  the  dominion  of  ma- 
chinery and  of  routine  labour.  For  social  arrangements  which 
enable  and  incite  each  consumer  to  seek  a  more  personal  satis- 
faction of  his  individual  needs  will  force  producers  to  study  these 
individual  needs  and  satisfy  them.  This  cannot  be  done  by  mere 
machine-economy,  which  rests  upon  the  opposite  hypothesis  that 
large  numbers  of  consumers  will  consent  to  sink  their  individual 
differences  of  need  and  taste  accepting  certain  routine  forms  of 
goods  which  do  not  exactly  meet  the  requirements  of  any  one  of 
them.  It  is,  therefore,  reasonable  to  expect  that  a  more  equal 
and  equitable  distribution  of  income  will  evoke  in  the  masses  of 
population,  who  now  consent  to  consume  common  'routine' 
goods  because  they  cannot  afford  to  consult  their  particular 
tastes  and  preferences,  a  more  personal  and  discriminative  de- 
mand, which  will  set  strict  limits  upon  the  machine  economy  and 
call  for  a  larger  application  of  individual  skill  in  the  various  crafts. 
Or  if,  valuing  more  highly  as  fields  for  personal  expression  the  less 
material  elements  in  their  standard  of  living,  they  still  consent  to 
utilise  routine  industry  for  the  satisfaction  of  their  common  phys- 
ical needs,  they  will  apply  an  increasing  proportion  of  their  in- 
terests and  their  incomes  to  the  acquisition  and  enjoyment  of 
those  goods,  artistic,  intellectual,  emotional,  which  are  more 
ennobling  alike  in  their  production  and  their  consumption. 

§  7.  A  final  word  upon  population.  Is  there  not  reason  to  be- 
lieve and  hope  that  this  sounder  distribution  of  work  and  wealth 
will  contribute  to  a  satisfactory  solution  both  of  the  quantitative 
and  the  qualitative  population  question?  If  women  were  no 
longer  forced  by  economic  pressure  into  marriages  for  which  they 
had  no  natural  inclination,  much  unfit  parentage  and  much  in- 
competent nurture  would  be  averted.  If  they  were  free  to  live 


PERSONAL  AND  SOCIAL  EFFICIENCY  319 

unmarried,  or  to  choose  the  father  of  their  children  and  the  size 
of  their  family,  the  normal  current  of  those  instincts  making  for 
the  preservation  and  instinct  of  the  race,  obstructed  by  artificial 
barriers  of  economic  circumstances,  would  be  restored  to  their 
natural  course.  If  the  support  of  a  young  family  were  no  longer 
a  heavy  and  injurious  strain  upon  the  economic  resources  of  the 
parents  and  their  future  career  a  grave  anxiety,  the  human  love  of 
children  and  the  attractions  of  a  complete  home  life  would  proba- 
bly check  that  rapid  decline  of  the  birth-rate  which  to  many  is 
one  of  the  darkest  features  of  our  present  order.  It  would  not, 
indeed,  restore  the  reckless  propagation  of  former  times  which 
imposed  on  parents,  and  chiefly  upon  the  mother,  a  burden  in- 
jurious in  its  private  incidence  and  detrimental  to  society.  But 
while  the  better  economic  order  would  stop  compulsory  mar- 
riages and  undesired  and  therefore  undesirable  offspring,  it 
would  restore  the  play  of  the  normal  philoprogenitive  instincts. 
The  net  effect  would  seem  to  be  some  retardation  of  the  de- 
cline of  birth-rate  in  those  types  of  families  where  the  condi- 
tions, physical  and  psychical,  appear  favourable  to  good  nature 
and  good  nurture  for  children,  and  a  positive  elimination  of  cer- 
tain types  of  union  unfavourable  to  sound  offspring.  The  to- 
tal effect  upon  the  quantitative  issue  would  of  course  depend  upon 
the  balance  between  this  freer  play  of  the  philoprogenitive  in- 
stinct and  the  other  influences,  not  directly  affected  by  economic 
causes,  which  make  for  smaller  families.  But  that  the  quality 
or  character  of  the  population  must  be  improved  by  the  more 
natural  play  of  the  rejective  and  selective  influences  here  indi- 
cated can  hardly  admit  of  controversy.  Indeed,  it  may  well  be 
urged  that  the  crowning  testimony  to  the  validity  of  the  human 
law  of  distribution  will  consist  in  the  higher  quality  of  human 
life  it  will  evoke  by  liberating  and  nourishing  the  natural  art  of 
eugenics  in  society. 


CHAPTER  XXII 

SOCIAL   SCIENCE  AND   SOCIAL  ART 

§  i .  The  task  of  a  human  valuation  of  industry  involved  at  the 
outset  the  arbitrary  assumption  of  a  standard  of  value.  That 
standard  consisted  in  a  conception  of  human  well-being  appli- 
cable to  the  various  forms  of  human  life,  man  as  individual,  as 
group  or  nation,  as  humanity.  Starting  from  that  conception  of 
the  health,  physical  and  spiritual,  of  the  individual  human  or- 
ganism, which  is  of  widest  acceptance,  we  proceeded  to  apply  the 
organic  metaphor  to  the  larger  groupings,  so  as  to  build  up  an  in- 
telligible standard  of  social  well-being.  This  standard,  at  once 
physical  and  spiritual,  static  and  progressive,  was  assumed  to  be 
of  such  a  kind  as  to  provide  a  harmony  of  individual  welfares 
when  the  growing  social  nature  of  man  was  taken  into  due 
account. 

With  the  standard  of  human  well-being  we  then  proceeded  to 
assign  values  to  the  productive  and  the  consumptive  processes  of 
which  industry  consists,  examining  them  in  their  bearing  upon 
the  welfare  of  the  individuals  and  the  societies  engaging  in  them. 

Now  this  mode  of  procedure,  the  only  possible,  of  course  in- 
volved an  immense  petitio  principii.  The  assumption  of  any  close 
agreement  as  to  the  nature  of  individual  well-being,  still  more 
of  social  well-being,  was  logically  quite  unwarranted. 

Economic  values  have,  indeed,  an  agreed,  exact  and  measur- 
able meaning,  derived  from  the  nature  of  the  monetary  standard 
in  which  they  are  expressed.  Now,  no  such  standard  of  the  hu- 
man value  of  economic  goods  or  processes  can  be  established. 
Yet  we  pretended  to  set  up  a  standard  of  social  value  and  to  apply 
a  calculus  based  upon  it,  claiming  to  assess  the  human  worth 
which  underlies  the  economic  costs  and  utilities  that  enter  into 
economic  values. 

Has  this  procedure  proved  utterly  illicit?  I  venture  to  think 
not.  Though  at  the  outset  our  standard  was  only  a  general  phrase 

320 


SOCIAL  SCIENCE  AND  SOCIAL  ART  321 

committing  nobody  to  anything,  the  process  of  concrete  applica- 
tion, in  testing  the  actual  forms  of  work  and  wealth  which  make 
up  industry,  gave  to  it  a  continual  increase  of  meaning.  While 
the  widest  divergence  would  be  found  in  the  formal  definitions  of 
such  terms  as  "human  welfare"  or  "social  progress,"  a  large  and 
growing  body  of  agreement  would  emerge,  when  a  sufficient  num- 
ber of  practical  issues  had  been  brought  up  for  consideration.  The 
truth  of  our  standard  and  the  validity  of  our  calculus  are  estab- 
lished by  this  working  test.  It  is  not  wonderful  that  this  should 
be  so,  for  the  nature  and  circumstances  of  mankind  have  so  much 
in  common,  and  the  processes  of  civilisation  are  so  powerfully  as- 
similating them,  as  to  furnish  a  continually  increasing  community 
of  experience  and  feeling.  It  is,  of  course,  this  fund  of  '  com- 
mon sense'  that  constitutes  the  true  criterion.  The  assumption 
that  '  common  sense '  is  adequate  for  a  task  at  once  so  grave  and 
delicate  may,  indeed,  appear  very  disputable.  Granting  that 
human  experience  has  so  much  in  common,  can  it  be  claimed  that 
the  reasoning  and  the  feeling  based  on  this  experience  will  be  so 
congruous  and  so  sound  as  to  furnish  any  reliable  guide  for  con- 
duct? Surely  '  common  sense '  in  its  broadest  popular  sense  can 
go  a  very  little  way  towards  such  a  task  as  a  human  interpreta- 
tion of  industry. 

There  is  no  doubt  a  good  deal  of  force  in  this  objection.  If  we 
are  to  invoke  'common  sense'  for  the  purposes  of  an  interpreta- 
tion or  a  valuation,  it  must  evidently  be  what  is  termed  an 
'  enlightened  common  sense. '  And  here  at  once  we  are  brought 
into  danger  lest  enlightenment  should  not  supply  what  is  re- 
quired, viz.,  a  clearer  or  more  fully  conscious  mode  of  common 
sense,  but  a  distorted  or  sophisticated  mode.  How  real  this 
danger  is,  especially  in  the  conduct  of  public  affairs,  may  be  re- 
cognised from  the  excessive  part  played  by  certain  highly  con- 
scious and  over-vocal  interests  of  the  commercial  and  intellect- 
ual classes  in  the  art  of  government.  The  most  pressing  task  of 
civilisation  in  the  self-governing  nations  of  our  tune  is  so  to  spread 
the  area  of  effective  enlightenment  as  to  substitute  the  common 
sense  of  the  many  for  that  of  the  few,  and  to  make  it  prevail.  It 
is  this  common  sense,  more  or  less  enlightened,  that  the  disin- 
terested statesman  takes  for  the  sanction  of  his  reading  of  the 


322  WORK  AND  WEALTH 

general  will  which  he  endeavours  to  express  in  the  conduct  of 
public  affairs.  That  it  is  never  at  any  time  a  certain,  a  perfectly 
coherent,  a  precise  criterion,  will  be  readily  admitted.  But  that 
it  is  sufficiently  intelligible,  sufficiently  sound,  is  the  necessary 
presupposition  of  all  democratic  statecraft.  And,  so  far  as  it  is 
thus  serviceable,  it  supplies  a  valid  standard  and  a  valid  calculus 
of  social  values.  Though  the  reading  of  this  standard  and  the 
application  of  this  calculus  will  always  be  subject  to  some  bias 
of  personal  idiosyncrasy,  the  weight  of  the  general  judgment 
commonly  prevails  in  the  more  important  processes  of  social 
valuation. 

But,  hi  pinning  our  faith  to  enlightened  common  sense  for  an 
interpretation  or  valuation  of  industry,  we  must  not  allow  our- 
selves to  be  deceived  as  to  the  amount  of  'scientific  accuracy' 
which  attends  such  a  procedure.  While  this  standard  can  and 
must  supply  the  rules  and  measurements  which  we  apply  in  the 
processes  of  detailed  analysis  and  comparison  by  which  we  esti- 
mate the  costs  and  utilities  and  the  net  human  values  of  the  va- 
rious industrial  activities  and  products,  we  must  not  put  into  this 
standard  a  stability  it  does  not  possess,  or  into  the  quantitative 
methods  it  uses  an  authority  for  social  conduct  which  they  are 
inherently  disqualified  from  yielding. 

§  2.  The  science  and  art  of  society  have  suffered  so  much  from 
want  of  exact  and  measured  information  that  it  is  only  right  and 
natural  for  immense  importance  to  be  attached  to  the  collection  of 
masses  of  ordered  and  measured  social  facts.  If  a  sufficient  num- 
ber of  trained  investigators  could  be  set  to  work  to  gather,  meas- 
ure, sift  and  tabulate,  the  various  orders  of  crude  fact  relating  to 
the  employment,  wages,  housing,  expenditure,  health,  thrift,  edu- 
cation, and  other  concrete  conditions  of  the  poorer  grades  of  town 
and  country  dwellers,  it  seems  as  if  a  number  of  accurate  and 
valid  generalisations  would  emerge  by  clear  induction  upon  which 
could  be  constructed  an  absolutely  scientific  treatment  of  poverty. 
Or,  again,  to  take  a  narrower  and  more  distinctively  economic 
issue,  that  of  the  shorter  working  day.  If  a  careful  series  of  ob- 
servations and  experiments  could  be  made  in  a  number  of  rep- 
resentative businesses,  as  to  the  effect  upon  the  size,  cost  and 
quality  of  output  produced  by  given  reductions  in  the  hours  of 


SOCIAL  SCIENCE  AND  SOCIAL  ART  323 

labour  among  various  classes  of  workers,  it  might  appear  as  if  an 
accurately  graded  social  economy  of  the  working  day  could  be 
attained  by  calculations. 

But  though  statesmen,  philanthropists  and  reformers  are  more 
and  more  influenced  in  their  judgments  and  policies  by  these 
measured  facts,  no  safe  mechanical  rules  for  the  guidance  of  their 
conduct  in  any  social  problem  can  be  based  upon  them.  The 
facts  and  figures  which  appear  so  hard  and  so  reliable  are  often 
very  soft  and  ineffective  tools  for  the  social  practitioner.  There 
are  several  defects  in  them  regarded  as  instruments  of  social  prog- 
ress. 

It  is  hardly  ever  possible  to  prove  causation  by  means  of  them. 
You  may  obtain  the  most  exact  statistics  of  housing  conditions 
and  of  death-rates  for  the  population  of  a  group  of  towns,  but  you 
cannot  prove  to  what  extent  'back  to  back'  houses  affect  infant 
mortality.  No  figures  professing  to  measure  the  causal  connec- 
tion between  drink  and  crime  or  insanity,  income  and  birth-rate, 
or  any  other  two  social  phenomena,  possess  the  degree  of  validity 
they  claim.  Why?  Because  you  can  never  isolate  the  factors 
completely  in  any  organic  or  social  problem,  and  you  can  never 
know  how  far  you  have  failed  to  isolate  them.  You  may,  indeed, 
by  varying  the  conditions  of  your  experiments  or  observations 
sufficiently,  obtain  practical  proof  of  organic  causation,  but  you 
can  seldom  express  this  causation  in  terms  of  any  quantitative 
accuracy.  Still  more  is  this  true  of  psychological  and  social  prob- 
lems. A  purely  descriptive  science  of  society  may  attain  a  con- 
siderable degree  of  quantitative  accuracy,  but  the  laws  expressing 
the  causal  relations  of  these  measured  facts  will  always  lack  the 
certainty  of  operation  and  the  measurability  of  action  belonging 
to  the  laws  of  chemistry  and  physics. 

Now  the  chief  facts  with  which  the  statesman  and  the  social 
reformer  are  concerned  in  forming  judgments  and  policies  are 
these  laws  of  causal  relation,  and  not  the  crude  measured  facts 
that  constitute  the  raw  material  of  statistics.  This  comparative 
inexactitude  or  lack  of  rigidity  in  the  laws  of  social  science  con- 
stitutes the  first  difficulty  in  applying  the  science  to  the  art  of 
social  conduct  with  the  same  amount  of  confidence  with  which 
the  laws  of  physics  and  chemistry  are  applied  to  the  mechanical 


324  WORK  AND  WEALTH 

arts.  But  another  difficulty  quite  as  grave  as  this  want  of  rigidity 
in  social  facts  is  the  instability  of  the  standard.  In  all  processes 
of  physical  measurement  it  is  customary  to  make  allowances  for 
errors  due  to  what  is  called  '  the  personal  equation, '  abnormali- 
ties of  observation  in  the  experimenter.  But  the  standard  of 
human  valuation,  the  enlightened  common  sense  of  a  community, 
applied  to  interpret  social  phenomena  in  terms  of  'utility'  or 
'welfare,'  will  evidently  be  subject  to  much  wider  variations,  and 
the  interpretation  of  this  standard  by  statesmen,  or  other  indi- 
vidual agents  of  society,  will  be  subject  again  to  wide  errors  of 
personal  bias. 

Illustrating  from  the  economic  sphere  which  is  our  concern, 
that  specialisation  of  industrial  life  which  has  made  three  quarters 
of  our  population  town-dwellers  and  is  making  our  nation  con- 
tinually more  dependent  upon  foreign  supplies  of  food,  will  have 
a  very  different  value  set  on  it  by  the  narrower  nationalism 
which  believes  the  interests  and  ambitions  of  nations  to  be  ir- 
reconcilable, and  by  the  wider  political  outlook  which  conceives 
the  economic  interdependence  of  nations  as  in  itself  desirable  and 
as  the  best  guarantee  of  national  security.  Or  again,  a  difference 
of  view  or  sentiment  regarding  the  relative  worth  of  the  personal 
qualities  of  enterprise  and  self-reliance  on  the  one  hand,  of  plod- 
ding industry  and  sociality  upon  the  other,  must  materially  af- 
fect the  values  given  to  such  phenomena  as  emigration,  public 
provision  against  unemployment,  copartnership,  taxation  of  high 
incomes  or  inheritances.  Indeed  it  is  quite  manifest  that  with 
every  difference  of  the  range  of  sympathy  and  imagination  the 
meaning  which  enlightened  common  sense  will  give  to  social 
welfare,  and  to  every  fact  submitted  to  this  test,  will  vary. 

These  considerations  may  seem  at  first  sight  to  invalidate  the 
entire  purpose  of  this  book,  the  endeavour  to  apply  a  social  cal- 
culus for  the  valuation  of  industry.  So  long  as  the  cost  and 
utility  of  economic  material  and  process  is  expressed  in  terms 
of  money,  you  have  a  fixed  standard  capable  of  yielding  exact 
valuations.  Endeavour  to  resolve  this  cost  and  utility  into  terms 
of  human  welfare  or  desirability,  you  appear  to  have  adopted  a 
fluctuating  standard  that  can  give  no  serviceable  information. 

§  3.  The  truth,  of  course,  is  that  a  scientific  valuation  of  any- 


SOCIAL  SCIENCE  AND  SOCIAL  ART  325 

thing  can  only  proceed  by  way  of  quantitative  analysis.  A 
standard  of  valuation  which  should  regard  qualitative  differences 
as  ultimate  would  not  be  scientific  at  all.  It  might  be  aesthetic 
or  hygienic  or  ethical,  according  to  the  nature  of  the  qualitative 
differences  involved.  A  strictly  scientific  valuation  of  wealth,  or 
of  cost  or  of  utility,  or  of  life  itself,  must  apply  a  single  standard 
of  measurement  to  all  the  various  objects  it  seeks  to  value,  i.  e.  it 
must  reduce  all  the  different  objects  to  terms  of  this  common 
denominator.  It  can  measure  and  value  all  forms  of  purchasable 
goods  or  services,  however  various  in  nature,  through  the  market 
processes  which  reduce  them  to  a  single  monetary  equivalent.  It 
can  measure  and  value  labour-costs  of  different  sorts,  either  by 
a  monetary  standard  or  by  some  measure  of  fatigue  or  vital  ex- 
penditure. It  can  measure  the  utility  of  various  sorts  of  food  or 
of  fuel,  by  comparing  the  quantities  of  working-power  or  output 
which  upon  an  average  they  yield.  It  can  ascertain  the  vital 
values  of  different  towns  and  occupations,  incomes,  races,  in 
terms  of  longevity,  fertility,  susceptibility  to  diseases,  etc. 

This  method,  essential  to  scientific  analysis,  rests  on  an  assump- 
tion that  £i  worth  of  bad  books  is  of  the  same  value  as  £i  worth 
of  good  books.  This  assumption  is  true  for  the  purpose  to  which 
it  is  applied,  that  of  a  market  valuation.  It  assumes  that  a  year's 
life  of  an  imbecile  or  a  loafer  is  worth  the  same  as  a  year's  life  of 
a  saint  or  a  genius,  and  so  it  is  for  the  purpose  of  vital  statistics. 

This  is  of  course  universally  admitted.  Science  proceeds  by 
abstraction:  it  does  not  pretend  to  describe  or  explain  the  indi- 
viduality or  particular  qualities  of  individual  cases,  but  to  dis- 
cover common  attributes  of  structure  or  composition  or  behav- 
iour among  numbers  of  cases,  and  to  explain  them  in  terms  of 
these  common  characters. 

So  far,  then,  as  the  so-called  value  of  anything,  or  any  happen- 
ing, consists  in  its  uniqueness  or  idiosyncrasy,  this  value  neces- 
sarily evades  scientific  analysis.  It  is  only  the  common  proper- 
ties, the  regularities,  the  conformities,  that  count  for  scientific 
valuation.  Nay,  more.  So  far  as  science  takes  account  of  indi- 
vidual qualities,  it  is  in  the  capacity  of  eccentricities,  i.  e.  it 
measures  the  amount  of  their  variation  from  the  average  or  normal. 
It  cannot  entertain  the  notion  that  there  is  any  sort  of  difference 


326  WORK  AND  WEALTH 

which  is  inherently  immeasurable,  i.  e.  that  there  is  difference 
in  kind  as  well  as  in  degree.1 

§  4.  A  scientific  analysis  treats  all  differences  as  differences  of 
degree.  So-called  difference  of  quality  or  kind  it  either  ignores, 
or  it  seeks  t9  reduce  them  to  and  express  them  in  differences  of 
quantity.  This  endeavour  to  reduce  qualitative  to  quantitative 
difference  is  the  great  stumbling-block  in  all  organic  science,  but 
particularly  in  the  departments  of  psychology  and  sociology.  The 
difficulty  is  best  illustrated  in  the  recent  extension  of  quantitative 
analysis  into  economics  by  the  method  of  marginal  preferences. 
Not  content  with  the  assumption  that  the  particular  costs,  con- 
sumable qualities,  etc.,  of  any  two  articles  selling  for  £i  each  may 
be  disregarded,  and  the  single  property  of  their  market  value 
abstracted  for  consideration,  the  mathematical  economists  now 
insist  that  the  study  of  marginal  preferences  discloses  impor- 
tant laws  of  the  psychology  of  individuals  and  societies. 

The  whole  process  of  expenditure  of  income  appears  to  be 
replete  with  instances  of  the  capacity  of  the  human  mind  to 
measure  and  apply  a  quantitative  comparison  to  things  which 
seem  to  be  different  in  kind.  It  might  seem  as  if  my  desire  to  help 
the  starving  population  of  India  in  a  famine,  and  my  desire  to 
attend  a  Queen's  Hall  concert  this  evening  were  feelings,  not 
merely  of  different  intensity,  but  of  such  widely  different  nature 
that  they  could  not  be  accurately  measured  against  each  other. 
And  yet  this  miracle  is  said  to  be  actually  performed,  when  I 
decide  upon  due  consideration  to  divide  the  7$  6d  in  my  purse  so 
as  to  give  55  to  the  Famine  Fund  and  to  buy  a  2S  6d  ticket  for  the 
concert,  instead  of  the  more  expensive  ticket  I  should  have 
bought  had  I  not  been  lured  to  the  Famine  meeting.  I  might 
have  given  the  whole  7$  6d  to  the  Famine  Fund,  and  missed  the 
concert.  Why  did  I  not?  I  must  have  performed  the  very  deli- 
cate spiritual  operation  of  reducing  my  humanitarian  feeling  to 
common  terms  with  my  love  of  music,  and  to  have  struck  a 
balance  which  can  only  mean  that  I  consider  the  additional  satis- 

1  It  was  precisely  on  this  rock  that  J.  S.  Mill's  utilitarianism  split.  He  tried  to 
incorporate  in  the  quantitative  calculus  of  Benthamite  pleasure  and  pain  distinc- 
tions of  the  quality  or  worth  of  different  sorts  of  pleasure  and  pain,  and  failed  to 
furnish  any  method  of  reducing  them  to  common  terms. 


SOCIAL  SCIENCE  AND  SOCIAL  ART  327 

faction  I  would  have  got  from  giving  another  25  6d  to  the  Famine 
Fund  to  be  a  little  less  than  the  satisfaction  I  would  get  from  the 
concert.  But  this,  of  course,  is  a  single  crude  instance  of  a  far 
more  elaborate  process  of  comparison  which  underlies  the  whole 
expenditure  of  my  income.  After  the  routine  expenditure  upon 
necessaries  and  comforts,  which  may  be  said  to  represent  my 
habitual  standard  of  consumption,  has  been  defrayed,  there  are 
various  attractive  uses  to  which  every  other  sovereign  and  shil- 
ling may  be  put.  All  sorts  of  different  appeals  of  pleasure,  duty, 
pride,  press  their  claims  through  a  thousand  different  channels. 
In  order  to  apportion  my  expenditure  as  I  do,  I  must  be  conceived 
as  reducing  all  these  claims  to  some  common  standard  of  desir- 
ability, and  deciding  how  much  to  lay  out  on  this,  how  much  on 
that.  That  physical  satisfactions  can  be  compared  with  one 
another,  by  the  application  of  some  standard  of  pleasure  may 
appear  intelligible  enough.  But  that  a  sense  of  moral  duty  can 
be  brought  into  direct  comparison  with  a  physical  pleasure,  or 
that  various  duties  can  be  compared  in  size  or  strength  with  one 
another,  would  seem  almost  impossible.  Yet  this  is  done  inces- 
santly and  quickly,  if  not  easily.  Even  when  it  is  claimed  that 
some  duties  are  so  paramount  that  a  good  man  will  refuse  to 
' weigh'  any  other  claim  against  them,  assigning  them  a  value 
which,  he  says,  is  'infinite,'  the  marginal  economist  will  not 
admit  the  claim  to  exemption.  '  This  only  means  that  to  him  the 
total  difference  between  the  command  of  things  in  the  circle  of 
exchange  that  he  already  enjoys,  and  an  indefinite,  or  unlimited 
command  of  them,  does  not  weigh  as  heavy  in  his  mind  as  the  dis- 
honour or  the  discomfort  of  the  specific  thing  he  is  required  to  do. 
It  does  not  mean  that  his  objection  is  "infinite."  It  merely 
means  that  it  is  larger  than  his  estimate  of  all  the  satisfaction 
that  he  could  derive  from  unlimited  command  of  articles  in  the 
circle  of  exchange,  and  this  is  a  strictly,  perhaps  narrowly,  limited 
quantity. ' 1 

But  though  there  are  men  whose  honour  is  so  incorruptible  as 
always  to  'outweigh'  other  considerations,  the  ethics  of  bribery 
make  it  clear  that  a  weaker  sense  of  honour  can  be  measured 
against  material  satisfaction,  and  that  is  all  that  seems  necessary 

1  Wicksteed,  Common  Sense  of  Political  Economy,  p.  405.    The  italics  are  mine. 


328  WORK  AND  WEALTH 

to  support  the  view  that  such  qualitative  distinctions  can  '  be  re- 
duced to  questions  of  quantity.'  Nor  is  it  merely  a  matter  of  the 
monetary  valuation  through  expenditure  of  incomes.  Precisely 
the  same  problem  arises  in  the  disposal  of  one's  time  or  energy. 
How  much  shall  be  given  to  the  performance  of  this  or  that  per- 
sonal or  family  duty,  to  recreation,  or  to  study?  In  what  propor- 
tions shall  we  combine  these  activities?  If  a  curtailment  of  money 
or  of  time  is  necessary,  how  much  shall  be  taken  from  this,  how 
much  from  that  employment? 

But  it  is  needless  to  multiply  examples.  When  any  scientific 
valuation  is  taken,  all  qualities  are  abstracted  and  quantities 
only  are  compared  and  estimated.  As  in  economics,  so  in  ethics. 
The  moral  struggle  to  resist  a  temptation  is  nearly  always  set  in 
scientific  psychology  as  a  mechanical  problem,  for  when  the  ethi- 
cist  professes  to  introduce  some  imponderable  'freedom  of  the 
will'  he  has  to  throw  overboard  his  science.  A  'conflict  of  duties/ 
as  Mr.  Wicksteed  recognises,  implies  that  'duty  itself  is  a  quanti- 
tative conception. ' l 

§  5.  Similarly  with  the  scientific  politician  who  seeks  to  make 
full  use  of  quantitative  analysis.  He  too  is  compelled  to  visu- 
alise and  represent  the  psychological  operation  through  which  a 
political  judgment  is  reached  as  a  mechanical  one,  conceived  in 
terms  of  size,  weight,  strain  or  intensity.  In  his  Human  Nature 
in  Politics  Mr.  Graham  Wallas  gives  a  very  interesting  example 
of  the  scientific  valuation  of  a  process  of  political  thinking,  viz. 
the  process  by  which  Mr.  Gladstone,  in  the  autumn  and  winter 
of  1885-6,  must  be  conceived  to  have  arrived  at  his  Home  Rule 
policy,  '  thinking  incessantly  about  the  matter'  and  'preparing 
myself  by  study  and  reflection. ' 

After  describing,  with  the  aid  of  Lord  Morley's  Life,  the 
various  studies  and  courses  of  reflection  employed,  the  'calcu- 
lations '  of  the  state  of  f eeling  in  England  and  Ireland,  the  exami- 
nation of  various  types  of  federation,  as  found  in  past  and  current 
history,  the  statistical  reports  upon  finance,  law  and  other  con- 
crete issues,  considerations  of  the  time  and  opportunity,  the 
play  of  the  emotional  valuations,  'the  irresistible  attraction  for 
him  of  all  the  grand  and  external  commonplaces  of  liberty  and 

'P.  409. 


SOCIAL  SCIENCE  AND  SOCIAL  ART  329 

self-government/  Mr.  Wallas  sees  the  results  of  all  this  acquisi- 
tion of  knowledge  and  reflection  gathering  and  being  coordinated 
into  a  problem  in  which  the  factors  are  quantities  and  the  solu- 
tion 'a  quantitative  solution/  'a  delicate  adjustment  between 
many  varying  forces.' 1  'A  large  part  of  this  work  of  complex 
coordination  was  apparently  in  Mr.  Gladstone's  case  uncon- 
scious/ an  operation  he  declares,  'rather  of  art  than  of  science.' 
Now,  since  '  the  history  of  human  progress  consists  in  the  gradual 
and  partial  substitution  of  science  for  art/  it  is  desirable  to  bring 
out  with  clearer  consciousness,  and  fortify  with  greater  accuracy 
of  knowledge,  the  processes  of  political  thinking.  'Quantitative 
method  must  spread  in  politics  and  must  transform  the  vocabu- 
lary and  the  associations  of  that  mental  world  into  which  the 
young  politician  enters.  Fortunately,  such  a  change  seems  at 
least  to  be  beginning.  Every  year  larger  and  more  exact  col- 
lections of  detached  political  facts  are  being  accumulated;  and 
collections  of  detached  facts,  if  they  are  to  be  used  at  all  in  po- 
litical reasoning,  must  be  used  quantitatively.'  2  Since  the  prob- 
lems of  political  conduct  are  thus  essentially  quantitative,  they 
can,  in  theory  at  any  rate,  be  'solved'  by  science.  'The  final 
decisions  which  will  be  taken  either  by  the  Commons — or  by 
Parliament  in  questions  of  administrative  policy  and  electoral 
machinery  must  therefore  involve  the  balancing  of  all  these  and 
many  more  considerations  by  an  essentially  quantitative  proc- 
ess.3 

§  6.  Now  how  far  is  it  true  that  any  political  problem  is  essen- 
tially quantitative  and  soluble  by  a  quantitative  process?  It  is 
of  course  to  be  admitted  at  once  that  the  science  of  statistics 
will  feed  a  statesman's  mind  with  a  variety  of  ordered  and  meas- 
ured facts.  But  will  this  mind,  working  either  scientifically  or 
artistically,  consciously  or  subconsciously,  go  through  a  dis- 
tinctively mechanical  process  of  balancing  and  measuring  and 
register  a  quantitative  judgment?  A  scientific  setting  of  the 
process  must  indeed  so  present  it.  But,  then,  a  scientific  setting 
of  any  process  whatsoever  sets  it  thus  in  purely  quantitative 
form.  The  real  issue  is  how  far  this  scientific  setting  is  competent 
to  interpret  and  explain  the  facts,  and  to  deliver  a  judgment 
1  P.  153.  *  P.  156.  *  P.  159.  The  italics  are  mine. 


330  WORK  AND  WEALTH 

which  shall  be  authoritative  for  the  conduct  of  an  individual  or  a 
society. 

In  order  to  test  the  scientific  claim  let  us  take  what  seems  to 
be  a  very  different  sort  of  action  from  that  of  the  politician  or 
the  business  man,  that  of  the  artist.  Follow  the  mind  of  the 
painter  as  he  plies  his  art.  Each  of  his  operations  too  involves 
considerations  of  quantity  and  measurement,  scope  and  focus, 
adjustment,  coordination,  balance,  the  application  of  definite 
blends  of  colours:  optics,  anatomy,  and  other  sciences  feed  his 
mind  with  exact  knowledge.  A  delicate  adjustment  of  quantities 
in  line  and  colour  is  involved  in  every  part  of  his  artistic  operations. 
But  does  the  operation  consist  of  these  quantitative  arrangements 
and  can  it  be  understood  or  'appreciated'  by  analysing  them? 
Evidently  not.  Why  not?  Because  in  such  an  analysis  or  ex- 
planation the  essentially  qualitative  or  creative  action  of  the 
artist,  which  gives  unity  and  artistic  value  to  the  whole  operation, 
escapes  notice.  Science  kills  in  order  to  dissect.  So  in  the  case 
of  every  other  art.  A  poem  involves  certain  ordered  arrange- 
ments of  sound  which  may  be  expressed  in  quantitative  terms  of 
rhythm  and  prosody.  But  any  attempt  to  'resolve'  it  into  these 
forms  loses  its  spirit,  its  unity,  its  value  as  a  poem.  Students  of 
the  drama  have  sometimes  explained  or  interpreted  a  tragedy  of 
Sophocles  or  Shakespeare  in  terms  of  the  gradation  of  intensity 
of  the  various  emotions  involved,  the  length  of  pauses  of  suspense, 
the  balancing,  relief  and  interlacing  of  the  plots  or  episodes,  the 
relative  strength  or  height  of  the  climaxes  and  subclimaxes,  the 
growing  rapidity  of  movement  towards  the  catastrophe.  But  can 
it  be  pretended  that  this  'mechanics'  of  the  drama  can  furnish  a 
standard  of  appreciation,  or  supply  laws  according  to  which  a 
'good'  drama  may  be  constructed  or  appreciated?  No.  An 
artistic  operation  is  essentially  organic,  creative  and  qualitative. 
None  of  these  characters  can  really  be  reduced  to  quantity. 
Science  by  quantitative  analysis  can  only  deal  with  the  skeleton 
not  with  the  life  that  informs  it. 

I  think  this  eternal  inability  of  science  adequately  to  interpret 
value,  or  explain  a  work  of  art,  will  be  generally  admitted.  It  is 
due  to  the  fact  that  this  work  and  its  value  are  inherently  inca- 


SOCIAL  SCIENCE  AND  SOCIAL  ART  331 

pable  of  being  reduced  to  quantities.  The  difference  between  one 
picture  and  another,  one  poem  and  another  is  a  difference  of 
quality.  It  is  of  course  true  that  by  a  merely  linguistic  necessity 
we  often  speak  of  a  picture  as  being  'much'  finer  than  another, 
and  compare  the  'greatness'  of  one  poet  with  that  of  another. 
But  we  are  aware  all  the  time  that  we  are  really  comparing  un- 
likes,  dealing  with  qualitative  differences.  On  no  other  sup- 
position indeed  can  we  understand  the  valuation  set  upon  a  work 
of  genius  as  compared  with  one  of  talent. 

"  Oh  the  little  more,  how  much  it  is, 
And  the  little  less  what  worlds  away." 

What  then  do  economists  mean  when  they  insist  that  quali- 
tative differences,  the  desires  and  satisfactions  which  have  such 
widely  diverse  origins  and  natures,  can  be  weighed  and  measured 
against  one  another,  and  that  problems  of  industry  are  essentially 
and  ultimately  quantitative?  Our  examination  of  artistic  activ- 
ities has  shown  that  in  each  case  quantities  are  involved,  but 
that  in  no  case  do  quantities  constitute  the  problem  of  action.  . 
But  how,  it  may  be  said,  do  you  dispose  of  the  admitted  facts 
that  by  means  of  monetary  valuations  these  diverse  desires  and 
satisfactions  are  reduced  to  a  common  standard,  are  compared, 
and  that  a  course  of  conduct  is  apparently  based  upon  these 
quantitative  considerations? 

The  answer  is  that  this  is  an  entirely  illusory  account  of  the 
psychical  process  by  which  a  man  lays  out  his  money,  or  his  time, 
or  his  energy.  He  does  not  take  the  several  uses  to  which  he 
might  apply  the  means  at  his  disposal,  reduce  them,  in  thought 
or  in  feeling,  to  some  common  term,  and  so  measure  the  amount 
he  will  expend  upon  each  object  that  the  'marginal'  or  'final' 
portion  of  each  use  shall  be  exactly  equal  in  the  utility  it  yields. 
The  'marginalist' 1  is  correct  in  saying  that  the  utility  imputed 
to  the  last  sovereign  I  expend  on  bread  during  the  year  must  be 

1  This  older  doctrine  of  marginalism,  concerned  with  the  comparison  of  marginal 
utilities,  or  marginal  costs,  in  the  application  of  expenditure  of  productive  energy, 
must  not  be  confused  with  the  novel  doctrine  which  we  discussed  in  Chapter  XI 
in  relation  to  wages.  In  the  newer  doctrine  any  unit  of  a  supply  may  be  regarded  as 
the  marginal  unit  and  every  unit  as  equally  productive  or  useful.  According  to  th« 
older  doctrine  each  unit  has  a  different  cost  or  utility. 


332  WORK  AND  WEALTH 

considered  to  be  neither  greater  nor  less  than  that  imputed  to  the 
last  sovereign's  worth  of  tobacco,  or  books,  holiday  or  charitable 
subscriptions.  In  precisely  the  same  sense  it  is  true  that  the  last 
brushful  of  green  and  brown  and  Turkey  red  expended  on  a  pic- 
ture has  the  same  art- value  to  the  painter. 

Perhaps  the  issue  can  be  made  clearer  by  reference  to  an  art 
usually  considered  less  'fine'  and  more  closely  affected  by  quanti- 
tative considerations  than  painting,  the  culinary  art.  The  com- 
position of  a  dish  is  here  expressed  in  proportions  of  its  various 
ingredients,  so  much  flour,  so  many  ounces  of  raisins,  so  many 
eggs,  so  much  sugar,  etc.  The  marginalist  would  dwell  upon  the 
crucial  fact  that  the  last  pennyworth  of  the  flour,  raisins,  eggs 
and  sugar,  taken  severally,  had  an  equal  value  for  the  pudding, 
and  that  these  marginal  or  final  increments  were  in  some  way 
causal  determinants  of  the  composition  of  the  pudding,  because 
in  using  the  ingredients  the  cook  took  care  to  use  just  so  much  of 
each,  and  neither  more  nor  less.  And  it  is  quite  true  that  the 
delicacy  of  the  culinary  art  will  in  fact  be  displayed  in  deciding 
whether  to  put  in  another  handful  of  raisins,  another  egg,  or  a 
spoonful  more  sugar.  But,  from  the  standpoint  of  trying  to  ap- 
preciate the  virtue  or  worth  of  the  dish  as  a  culinary  creation,  it 
cannot  be  admitted  that  any  special  importance  or  causal  deter- 
mination attaches  to  the  last  increments  of  the  several  ingre- 
dients. For  it  is  evident  that  the  'how  much'  and  therefore  the 
'margin'  of  each  ingredient  is  itself  determined  by  the  conception 
of  the  tout  ensemble  in  the  mind  of  the  creator  or  inventor. 

And  this  evidently  applies  to  every  form  of  composition  em- 
bodying some  unity  of  design  or  purpose,  whether  the  treatment 
of  a  subject  in  pictorial  or  dramatic  art,  the  making  of  a  new  dish, 
the  construction  of  a  machine,  the  arrangement  of  a  business,  or 
the  laying  out  of  a  garden  or  a  fortune.  So  far  as  an  economical 
use  is  made  of  materials  or  means  of  any  kind  for  the  attainment 
of  any  end  this  marginal  equivalence  is  implied.  The  scientific 
analysis  of  any  composite  arrangement,  mechanical,  organic, 
conscious,  involves  this  marginal  assumption.  It  is  an  axiom  of 
all  'economy'  whatsoever. 

But  it  explains  nothing.  Nay,  in  dealing  with  any  organic  be- 
ing on  any  plane  of  action,  it  darkens  counsel.  It  does  so  in  sev- 


SOCIAL  SCIENCE  AND  SOCIAL  ART  333 

eral  ways.  First  by  assuming  or  asserting  that  the  human  mind 
can  and  does  get  rid  of  qualitative  differences  by  referring  them 
to  a  quantitative  standard:  secondly,  by  assuming  or  asserting 
that  organic  unity  can  be  broken  up  into  its  constituent  parts  and 
explained  in  terms  of  these  measured  parts;  thirdly,  by  assuming 
or  asserting  a  uniformity  of  nature  which  conflicts  with  the 
'novelties'  in  which  creative  energy  expresses  itself.  All  these 
fallacies  are  just  as  much  involved  in  the  attempt  to  explain  the 
expenditure  of  an  income  as  a  purely  quantitative  problem,  as  in 
the  attempt  to  explain  the  art-value  of  a  picture  in  terms  of  the 
respective  quantities  of  line  and  colour.  In  each  case  the  root- 
fallacy  is  the  same,  the  illicit  substitution  of  the  abstract  '  quan- 
tity' for  the  actual  stuff,  which  is  always  qualitative  and  is  never 
identical  in  any  two  cases,  or  at  any  two  tunes. 

§  7.  In  laying  out  my  income,  I  do  not  in  fact  compare  all  my 
several  needs  or  tastes,  and  having  assigned  so  much  utility  or 
desirability  to  each,  plan  my  expenditure  so  as  to  spend  on  each 
just  as  much  as  it  is  worth,  equalising  all  expenditure  at  the  mar- 
gins so  as  to  maximise  the  aggregate.  Even  Benjamin  Franklin  or 
Samuel  Smiles  would  not  really  do  this,  though  they  might  think 
they  did,  and  perhaps  draw  up  schedules  to  enforce  the  notion. 
So  far  as  I  act  like  a  free,  rational  being,  not  a  creature  of  blind 
custom  or  routine,  I  employ  all  my  personal  resources  of  knowl- 
edge, taste,  affection,  energy,  time,  and  command  of  material 
resources,  in  trying  to  realise  my  ideal  of  a  good  or  desirable  life. 
In  the  execution  of  this  design,  however  it  be  regarded,  self- 
realisation  or  career,  I  utilise  my  various  resources  in  a  manner 
strictly  analogous  to  that  in  which  the  artist  employs  the  mate- 
rials and  instruments  of  his  art.  Upon  the  canvas  of  time  I  paint 
myself,  using  all  the  means  at  my  disposal  to  realise  my  ideal. 
Among  these  means  is  my  money  income.  Its  expenditure  goes 
into  the  execution  of  my  design.  So  far  as  I  am  justified  in  sepa- 
rating my  expenditure  of  money  from  the  expenditure  of  my 
time  and  other  resources,  and  in  regarding  the  design  as  an  '  eco- 
nomic picture,'  I  can  readily  perceive  that  the  unity  of  my  artis- 
tic purpose  involves  and  determines  the  expenditure  of  my  in- 
come in  definite  proportions  upon  the  various  objects  whose 
'consumption'  contributes  to  the  design.  But  these  proportions 


334  WORK  AND  WEALTH 

are  not  determined  by  a  calculation  of  the  separate  values  of  the 
various  items.  For,  strictly  speaking,  they  have  no  separate 
value,  any  more  than  have  the  lines  or  colours  in  a  picture.  Only 
by  consideration  of  what  we  may  term  indifferently  the  artistic 
or  organic  purpose  of  the  whole  can  a  true  appreciation  or  valua- 
tion be  attained.  The  full  absurdity  of  suggesting  that  anything 
is  learned,  either  in  the  way  of  valuation  or  of  guidance,  by  the 
quantitative  analysis,  or  the  wonderful  discovery  of  equivalence 
of  value  at  the  margins,  will  now  be  apparent.  This  mathemati- 
cal analysis  can  do  no  more  towards  explaining  the  expenditure 
of  income  than  explaining  the  expenditure  of  paint.  Of  course, 
the  expenditure  at  the  margins  appears  to  produce  an  equal 
utility:  that  truth  is  obviously  contained  in  the  very  logic  of  the 
quantitative  analysis.  But  that  quantitative  analysis,  neces- 
sarily ignoring,  as  it  does,  the  qualitative  character  which  the 
organic  unity  of  the  whole  confers  upon  its  parts,  fails  to  perform 
the  psychological  interpretation  claimed  for  it. 

So  far  as  it  is  true  that  the  last  sovereign  of  my  expenditure  in 
bread  equals  in  utility  the  last  sovereign  of  my  expenditure  in 
books,  that  fact  proceeds  not  from  a  comparison,  conscious  or 
unconscious,  of  these  separate  items  at  this  margin,  but  from  the 
parts  assigned  respectively  to  bread  and  books  in  the  organic 
plan  of  my  life.  Quantitative  analysis,  inherently  incapable  of 
comprehending  qualitative  unity  or  qualitative  differences,  can 
only  pretend  to  reduce  the  latter  to  quantitative  differences. 
What  it  actually  does  is  to  ignore  alike  the  unity  of  the  whole 
and  the  qualitativeness  of  the  parts. 

Nor  is  this  all.  It  is  not  even  true  that  an  application  of  quan- 
titative analysis  does  find  exact  equivalence  of  values  at  the  mar- 
gins. Taking  a  concrete  instance,  it  is  not  true  that  the  last  sov- 
ereign of  my  expenditure  in  books  equals,  or  even  tends  exactly 
to  equal,  in  utility,  that  of  my  last  sovereign's  expenditure  on 
bread.  This  would  be  the  case  if  the  future  tended  precisely  to 
repeat  the  past.  In  that  event  my  experience  of  the  economy  of 
last  year's  expenditure  would  progressively  correct  any  errors, 
and  I  should  come  to  employ  my  resources  with  greater  economy 
or  exactitude  to  the  attainment  of  the  same  design.  But  I  am 
not  the  same  this  year  as  last,  my  environment  is  not  the  same, 


SOCIAL  SCIENCE  AND  SOCIAL  ART  335 

my  resources  are  not  the  same,  and  the  plan  of  life  I  make  will 
not  be  the  same.  This  awkward  factor  of  Novelty,  involved  in 
organic  nature,  belongs  to  every  creative  art,  being  indeed  of  the 
very  essence  alike  of  art  and  of  creation,  and  impairs  to  an  in- 
calculable extent  the  quantitative  calculus  and  its  marginal  in- 
terpretation. An  addition  of  £100  to  my  income  this  year 
cannot  be  laid  out  by  calculation  so  as  to  increase  each  sort  of 
expenditure  to  an  extent  which  will  secure  marginal  equivalence 
of  utility.  That  is  to  say,  I  cannot  tell  what  will  be  the  best  em- 
ployment of  my  larger  income,  until  I  have  tried.  The  larger 
income  will  produce  nowhere  a  strictly  proportionate  increase 
of  expenditure  on  a  number  of  several  objects.  It  would  shift 
my  economic  plan  of  life,  making  a  new  kind  of  life,  and  involving 
all  sorts  of  changes  in  the  items,  which  follow  as  consequences 
from  the  changed  organic  plan.  This  new  plan  I  cannot  accu- 
rately calculate  or  forecast.  It  will  work  itself  out  as  I  proceed. 
Its  execution  involves  no  doubt  elements  of  forethought  and  even 
calculation,  but  the  central  and  essential  change  will  proceed 
from  some  novelty  of  conception,  some  qualitative  change  of 
purpose.  In  a  word,  it  is  the  creative  power  of  man,  the  artist, 
that  is  ever  at  work,  and  the  art  faculties  of  inspiration,  faith  and 
adventure  will  lead  him  to  experiment  anew  with  his  resources. 
As  a  man  gains  more  intelligence,  undergoes  some  new  critical 
experience  of  his  outer  or  his  inner  life,  encounters  some  new 
personal  influence,  his  entire  mode  of  living  will  change,  and  in- 
numerable alterations  in  the  outlay  of  his  income  will  take  place. 
Some  articles  of  earlier  expenditure  will  disappear,  new  articles 
will  take  their  place,  and  the  respective  importance  of  many  arti- 
cles remaining  in  the  expenditure  will  be  shifted.  A  change  of 
residence  from  country  to  town,  a  'conversion,'  religious  or 
dietetic,  a  transfer  from  an  outdoor  manual  to  an  indoor  sedentary 
employment,  marriage,  or  any  other  critical  event,  must  bring 
about  some  such  large  complex  organic  alteration.  A  comparison 
of  the  items  of  expenditure  before  and  after  will  shed  interesting 
light  upon  the  results  of  the  psycho-economic  change  of  which 
they  afford  a  quantitative  register,  but  it  cannot  be  regarded  as 
an  explanation  of  the  change  of  heart  or  of  outlook  which  is  the 
determinant  act  from  which  these  shifts  of  values  flow. 


336  WORK  AND  WEALTH 

§  8.  The  life  of  a  society  presents  this  same  problem  on  a  larger 
scale.  On  the  plane  of  economic  conduct  which  directly  concerns 
us,  every  one  of  the  innumerable  and  incessant  alterations  in 
methods  of  production  and  consumption  ranks  as  an  organic 
novelty,  and,  in  so  far  as  it  is  novel,  necessarily  baffles  quantita- 
tive analysis  and  scientific  prediction.  It  would,  of  course,  be 
incorrect,  either  in  the  case  of  an  individual  or  of  a  society,  to 
represent  any  change  as  entirely  novel.  Organic  growth  itself 
is  largely  a  quantitative  conception:  the  changes  are  proportion- 
ate in  size  to  former  changes,  and  are  in  definite  quantitative 
relations  to  one  another.  The  doctrine  of  continuity  thus  enables 
us  to  go  far  in  calculating  the  character  of  future  changes.  So 
far  the  scientific  interpretation  of  uniformity  of  nature  carries 
us.  But  quantitative  growth,  or  any  other  set  of  quantitative 
changes,  however  calculable,  always  carries  some  qualitative 
and  essentially  incalculable  elements  of  change.  These  are  what 
we  signify  by  novelty.  It  is  their  occurrence  in  evolution  that 
baffles  the  clean  logic  of  the  geologist,  still  more  of  the  biologist, 
and  far  more  of  the  psychologist.  Whether  they  show  them- 
selves as  'faults'  or  'sports'  or  'mutations,'  they  represent  the 
disability  of  past  experience  to  furnish  'laws'  for  their  calculation, 
and  the  practical  importance  which  attaches  to  these  incalculable 
or  qualitative  changes  is  very  considerable.  Though  they  may 
be  comparatively  infrequent  and  may  appear  on  first  inspection 
almost  negligible  breaks  in  the  otherwise  calculable  continuity  of 
the  evolutionary  process,  their  determinant  importance  is  receiv- 
ing ever  greater  recognition.  In  human  conduct,  individual  or  so- 
cial, these  mutations  seem  to  play  a  larger  part,  chiefly  by  reason 
of  the  operation  of  the  so-called  '  freedom '  of  the  human  will.  For 
whatever  philosophic  view  be  held  regarding  the  determination 
of  the  acts  of  the  will,  its  operation  scatters  mutations  thickly 
over  the  realm  of  human  conduct.  Hence  it  remains  true  that 
science  can  do  so  much  less  in  explaining  and  predicting  human 
history  than  in  any  other  department  of  nature.  No  doubt  here, 
as  elsewhere,  science  hopes  to  apply  quantitative  analysis  of  such 
increasing  accuracy  as  to  enable  it  to  determine  and  predict  a 
larger  number  of  such  mutations.  Since  there  doubtless  exist 
quantitative  conditions  for  every  qualitative  change,  it  may 


SOCIAL  SCIENCE  AND  SOCIAL  ART  337 

seem  theoretically  possible  for  science  some  day  to  catch  up  with 
'the  art  of  creation.'  This  supposition,  however,  assumes  that 
the  number  of  permutations  and  combinations  in  'nature'  is 
limited,  and  that,  therefore,  in  some  extensive  run  history  does 
repeat  itself.  The  final  victory  of  science  thus  seems  to  depend 
upon  the  adoption  of  a  cyclical  view  of  the  history  of  the  universe. 
But,  for  all  present  practical  purposes  of  social  processes,  science 
is  so  far  removed  from  this  perfection  that  the  economist  and  the 
sociologist  are  continually  compelled  to  allow  for  unpredictable 
changes  of  such  frequency  and  of  such  determinant  importance 
that  their  claim  to  direct '  the  general  will '  and  to  mould  the  con- 
scious policy  of  a  society  must  be  very  modestly  expressed. 

Such  laws  of  causation  as  they  derive  from  past  observation 
and  experiment  must  usually  be  conceived  as  laws  of  tendencies, 
seldom  endowed  with  any  rigorous  authority  of  close  determina- 
tion, and  still  more  seldom  with  accuracy  of  quantitative  predic- 
tion. 

§  9.  It  is  sometimes  supposed  that  this  hampering  effect  of  the 
uniqueness,  irregularity,  novelty  and  freedom  of  the  individual 
and  social  organisms  can  be  got  rid  of  by  a  process  of  multiplica- 
tion in  which  particular  eccentricities  will  cancel.  To  economists, 
in  particular,  there  is  a  strong  temptation  to  fall  back  upon  the 
average  man,  in  the  belief  that  scientific  determinism  justifies 
itself  through  averages.  Now  the  radical  defect  of  measurement 
by  averages,  as  a  mode  of  social  valuation,  has  already  been  dis- 
closed. The  ascertained  fact  that  the  average  money  income,  or 
even  the  average  real  income,  of  the  British  people  may  have 
risen  10%  within  the  last  decade,  disables  itself,  by  the  very  process 
of  averaging,  from  informing  us  as  to  the  effect  of  this  increase  of 
national  wealth  upon  national  welfare.  For  this  effect  depends 
upon  the  distribution  of  the  increase,  and  the  process  of  averag- 
ing consists  in  ignoring  this  vital  fact  of  distribution. 

This  defect  of  averages  for  purposes  of  interpretation,  of  course, 
involves  a  consequent  defect  for  purposes  of  guidance  in  economic 
conduct.  The  calculation  that  a  given  course  of  national  conduct, 
e.  g.,  the  expenditure  of  so  many  millions  upon  improved  trans- 
port, will  raise  the  national  or  average  income  by  so  much,  loses 
all  the  worth  of  its  superficial  exactitude  unless  we  know  how 


338  WORK  AND  WEALTH 

much  of  the  increase  is  going  to  the  landlord  in  rising  rent,  how 
much  to  the  labourer  in  rising  wages. 

This,  of  course,  involves  no  repudiation  of  the  true  utility  of 
averages,  but  only  of  the  spurious  accuracy  which  their  forms 
suggest.  The  exact  statement  that  the  average  income  of  an 
English  family  has  risen  10%  in  the  last  decade  does  imply  a 
reasonable  probability  that  an  increase  of  total  national  welfare 
has  taken  place.1  But  it  gives  no  information  as  to  the  amount  of 
that  increase,  and  is  consistent  with  the  fact  that  there  may  have 
been  a  decrease,  owing  to  a  worsening  of  the  distribution  of  the 
growing  income,  or  of  the  labour  and  other  costs  involved  in  its 
production. 

§  10.  So  far  upon  the  supposition  that  welfare  is  a  quantity. 
It  will  occur  to  statisticians  that  the  information  to  be  got  from 
averages  of  income  may  be  justified  by  nicer  discrimination.  If, 
in  addition  to  learning  that  the  average  income  of  all  families  has 
risen  10%,  we  discovered  the  different  percentages  which  had 
been  added  to  rent,  interest,  profits  and  wages,  or,  better  still,  the 
ratio  of  increase  for  the  different  income  levels,  we  should  surely 
then,  by  this  extended  use  of  averages,  get  nearer  towards  a  quan- 
titative estimate  of  the  increase  of  welfare  that  had  been  achieved ! 

This  must  certainly  be  admitted.  By  the  nicer  and  more  com- 
plex application  of  these  measures,  we  should  approach  a  more 
accurate  account  of  welfare,  so  far  as  it  is  ultimately  expressible 
in  terms  of  quantity.  If  we  discovered  that  a  proposed  course  of 
national  policy  would  not  only  increase  the  average  income  by 
10%  but  would  increase  the  lower  incomes  of  the  population  in  a 
higher  ratio,  we  should  seem  to  have  got  a  scientific  warrant  for 
the  policy.  But  even  this  degree  of  scientific  authority  would 
be  purchased  to  some  extent  by  an  artificial  simplification  of  the 
actual  problem  of  social-economy.  To  the  statesman  no  prob- 
lem of  actual  finance  is  capable  of  being  set  in  such  distinctively 
quantitative  terms.  Not  merely  cannot  an  earthly  Chancellor 
of  the  Exchequer  know  how  much  can  be  added  to  the  incomes 

1  Professor  Pigou  in  his  Wealth  and  Welfare  discusses  with  skill  and  precision  the 
measurable  influences  of  an  increase  of  the  general  dividend  upon  general  welfare, 
but  omits  to  take  into  consideration  the  'cost'  factors  which  enter  into  'welfare,' 
however  that  term  be  defined. 


SOCIAL  SCIENCE  AND  SOCIAL  ART  339 

of  the  several  classes  by  the  expenditure  of  so  many  millions  upon 
transport,  or  upon  any  other  single  service,  but,  if  he  could,  he 
would  not  be  much  nearer  to  the  standard  he  requires.  There 
are  many  different  ways  of  raising  the  revenue  hi  question  and  an 
infinite  number  of  combinations  of  these  ways.  The  same  holds 
of  expenditure.  To  take  the  simplest  case;  the  ten  millions 
that  he  raises  may  be  applied  to  transport,  or  to  education,  or  to 
defence,  all  the  sum  or  any  proportion,  to  each.  Each  expendi- 
ture claims  to  be  beneficial,  an  outlay  for  public  welfare.  But 
the  benefit  in  the  several  outlays  is  not  equally  presentable  in 
terms  of  money  income,  and,  so  far  as  definitely  economic  gains 
accrue,  they  are  not  equally  immediate  or  equally  assured.  It  is 
evident  that  no  amount  of  possession  of  statistical  knowledge 
can  possibly  reduce  the  problem  entirely,  or  even  mainly,  to  one 
of  quantitative  calculation.  It  is  equally  true  that  when  the 
problem  is  solved,  its  solution  will  appear  in  quantitative  shape, 
i.  e.  so  much  money  for  transport,  so  much  for  education,  so  much 
for  defence.  It  will  seem  to  have  been  worked  out  by  reducing 
the  three  forms  of  desired  benefits  to  common  terms,  and  then 
dividing  the  ten  millions  among  them  so  as  to  secure  an  equiva- 
lence of  gains  at  the  margins.  Economists  will  point  out  trium- 
phantly the  alleged  fact  that  the  last  £100  spent  on  education 
produces  a  national  return  of  welfare  exactly  equal  to  that  ob- 
tained by  the  last  £100  spent  on  gunboats,  though  his  assertion 
remains  inherently  insusceptible  of  proof.  In  truth,  the  Chan- 
cellor's mind  does  not  work  in  this  way.  So  far  as  his  statecraft 
is  disinterested,  or  even  allowing  for  every  form  of  bias,  his  mind 
forms  an  ideal  of  social  progress,  of  a  happier  or  better  state  of 
things,  and  allots  the  outlay  of  his  ten  millions  in  an  endeavour 
to  assist  in  realising  this  ideal.  Now  the  ideal  itself  is  not  chiefly 
a  product  of  quantitative  calculus,  but  of  his  more  or  less  in- 
formed imagination,  and  his  more  or  less  wholesome  sympathies. 
His  views  as  to  the  means  of  realising  this  ideal  can  never  be 
purely  scientific,  though  science  may  here  be  of  considerable 
assistance. 

If,  treating  expenditure  more  widely  as  an  act  of  public  policy, 
we  consider  it  as  an  operation  of  the  general  will  of  the  commu- 
nity, a  true  act  of  political  economy,  the  problem  remains  essen- 


340  WORK  AND  WEALTH 

tially  the  same.  When  looked  at  through  scientific  spectacles, 
it  is  a  purely  quantitative  and  mechanically  ordered  act,  because 
the  scientific  method  by  its  very  modus  operandi  ignores  the 
qualitative  factors.  So  the  nation  is  supposed  to  balance  this 
gain  against  another,  and  to  lay  out  its  revenue  so  as  to  get  the 
largest  aggregate  of  some  common  homogeneous  stuff  called  'wel- 
fare ',  in  such  a  way  that  the  last  £100  spent  on  education  is  equiv- 
alent in  its  yield  of  this  'welfare'  to  the  last  £100  spent  on  the 
latest  super-dreadnaught,  or  the  last  lot  of  old-age  pensions. 
In  truth,  the  common  will  no  more  functions  in  this  fashion 
than  the  personal  will  of  the  Chancellor.  In  each  case  State- 
craft is  an  Art,  and  the  financial  policy  is  an  artistic  or  creative 
work  in  which  quantities  are  used  but  do  not  direct  or  dominate. 

By  this  line  of  argument  it  may  appear  as  if  we  had  repudiated 
the  entire  utility  of  a  scientific  calculus.  This,  however,  is  not 
the  case.  For  though  all  the  determinant  acts  of  policy  or  wel- 
fare, performed  by  an  individual  or  a  society,  involve  organic 
unity  of  design,  and  the  qualitative  considerations  appertaining 
thereto,  important  and 'indeed  necessary  assistance  is  rendered 
by  the  quantitative  analysis  of  past  acts  expressed  in  the  form  of 
scientific  generalisations.  A  clearer  understanding  of  the  nature 
and  extent  of  this  cooperation  between  science  and  art  in  the 
conduct  of  life  enforces  this  truth. 

§  ii.  Science  takes  its  stand  upon  a  twofold  application  of  the 
assumption  of  the  uniformity  of  Nature,  first,  that  all  differences 
of  composition  can  be  treated  as  differences  of  quantity  or  de- 
gree, secondly,  that  history  repeats  itself.  Now,  just  so  far  as 
these  assumptions  fit  the  facts,  Science  is  valid  for  interpretation 
and  for  guidance.  This  explains  why  astronomy,  physics  and 
chemistry  are  more  'exact'  sciences  than  biology  or  psychology, 
and  why  they  are  able  to  give  more  reliable  and  authoritative 
rules  for  the  arts  of  navigation,  engineering  and  drug-making, 
than  the  latter  can  for  medicine,  for  breeding  or  for  education. 
Edward  Carpenter  has  remarked  that  astronomy  is  the  most 
exact  of  the  applied  sciences,  because  we  know  least  about  it, 
i.  e.  because  we  treat  its  subject-matter  almost  entirely  from  the 
single  quantitative  standpoint  of  space  relations.  In  all  arts 
dealing  entirely  or  mainly  with  inorganic  matter  science  occupies 


SOCIAL  SCIENCE  AND  SOCIAL  ART  341 

a  seat  of  high  authority,  because  of  the  high  relative  uniformity 
of  this  matter  and  the  comparative  regularity  of  its  behaviour. 
In  physics  or  in  inorganic  chemistry  the  individual  differences 
or  eccentricities  of  the  material  are  so  trivial  that  they  can  usually 
be  disregarded,  and  history  repeats  itself  with  so  much  regularity 
that  quantitative  laws  apply. 

The  passage  from  the  inorganic  to  the  organic  involves,  as  we 
recognise,  a  double  assertion  of  the  qualitative:  first,  in  re- 
spect of  the  unity  and  uniqueness  of  the  organic  structure,  and 
secondly,  by  reason  of  the  novelty  that  attends  each  act  of  or- 
ganic change,  vital  movement,  assimilation,  growth,  reproduc- 
tion or  decay.  The  uniqueness  of  the  individual  organism  and  the 
novelty  of  each  of  its  changes  are  an  assertion  of  the  qualitative 
nature  of  the  subject-matter.  So  far  as  this  qualitative  nature 
prevails  and  counts  for  '  conduct, '  scientific  analysis  is  impotent 
for  interpretation  and  advice.  When  organic  matter  attains  the 
character  of  consciousness  and  the  still  higher  character  of  self- 
consciousness,  the  qualitative  considerations  reach  a  maximum, 
and  the  interpretation  and  directive  power  of  science  a  minimum. 
But  that  minimum  must  not  be  disparaged.  It  is  not  incon- 
siderable. The  assistance  which  scientific  laws  can  render  to  the 
finest  arts  of  human  conduct  is  very  important  and  is  capable  of 
constant  augmentation.  For  so  far  as  human  nature  is  uniform 
and  stable  among  the  units  which  constitute  the  life  whose  con- 
duct and  welfare  are  in  question,  the  interpretation  and  direction 
of  science  has  validity.  To  this  extent  a  utilitarian  calculus, 
based  upon  analysis  of  past  experience,  can  aid  the  statesman  or 
the  philanthropist  in  working  out  his  design.  In  the  region  of 
industry  the  extent  of  this  scientific  service  will  be  even  greater 
than  in  the  arts  of  conduct  whose  material  is  more  exclusively 
organic  or  psychical.  For  industry,  considered  as  an  art  of  human 
welfare,  will  consist  largely  in  the  orderly  and  progressive  adapta- 
tion of  inorganic  matter,  or  of  organic  matter  whose  organic  dif- 
ferences can  be  ignored,  to  the  satisfaction  of  those  needs  of  man- 
kind in  which  men  are  similar.  That  is  to  say,  in  industry  there 
exists  and  will  remain  a  great  deal  of  work  and  of  consumption 
which  is  essentially  of  a  uniform  or  routine  character,  requiring 
to  be  done  by  measured  rules,  and  depending  for  its  utility  upon 


342  WORK  AND  WEALTH 

the  exclusion  of  all  individuality  or  quality.  This  applies,  not 
only  to  those  industrial  processes  which  we  term  strictly  mechani- 
cal, but  to  a  great  many  others  where  quality  is  a  matter  of  com- 
parative indifference.  In  the  progressive  economy  of  human 
welfare  mechanical  or  routine  production  will  even  frequently 
displace  an  art  in  which  quality  was  once  displayed.  So  home- 
baking,  into  which  no  small  degree  of  culinary  skill  could  go,  has 
given  way  to  machine-baking  in  which  the  element  of  personal 
skill  plays  a  diminished  part,  and  on  which  the  individual  taste 
of  the  consumer  exerts  little  directive  influence.  This  may  be 
taken  as  a  typical  example  of  the  displacement  of  qualitative 
art  by  quantitative  mechanism.  It  is,  of  course,  of  very  wide  ex- 
tension, being,  in  fact,  commensurate  with  the  application  of 
scientific  methods  in  the  world  of  industry.  Indeed,  the  sciences 
of  chemistry  and  physics,  botany  and  biology,  are  everywhere 
invading  the  'arts'  of  industry  and  imposing  'rules'  upon  indus- 
trial processes.  Even  more  significant  is  the  application  of  the 
still  infantile  science  of  psychology  to  the  arts  of  business  organ- 
isation and  enterprise  and  of  marketing.  How  can  psychology 
assist  in  the  delicate  art  of  recommending  goods  to  possible  pur- 
chasers? Only  on  the  supposition  that  there  is  sufficient  uni- 
formity and  stability  in  human  nature  to  enable  the  measured 
rules  of  past  experiment  upon  other  men  to  hold  of  this  man. 
Only  so  far  as  men  are  really  the  same  sort  of  stuff,  or  so  far  as 
any  differences  are  measurable  and  calculable.  Novelty  alone 
can  baffle  applied  science. 

If  it  were  true,  as  some  appear  to  think,  that  machinery  and 
routine  method  were  destined  continually  to  absorb  a  larger  and 
larger  proportion  of  human  work,  and  to  direct  a  larger  and 
larger  share  of  human  life,  economic  science  with  its  quanti- 
tative calculus  would  acquire  a  continual  increase  of  exactitude, 
and  a  growing  capacity  for  direction  in  the  art  of  social  conduct. 
But  if,  as  seems  more  reasonable,  progressive  industry  must  serve 
to  feed  a  richer  liberty  and  novelty  of  individual  and  social  life, 
the  domain  of  quantitative  calculus,  though  absolutely  enlarging, 
may  be  relatively  shrinking. 

We  now  seem  able  to  get  a  more  accurate  understanding  of 
what  a  scientific  calculus  can  do  for  the  assistance  of  the  art  of 


SOCIAL  SCIENCE  AND  SOCIAL  ART  343 

social  welfare.  It  can  do  for  that  art  what  it  can  do  for  every 
other  art,  viz.  furnish  rules  for  the  regular.  So  far  as  the  stuff 
which  constitutes  or  composes  human  welfare  is  uniform,  i.  e. 
so  far  as  men  are  alike  in  their  needs,  and  the  material  for  the 
satisfaction  of  these  needs  is  similar,  it  can  supply  rules  of  social 
economy  which  will  have  a  high  degree  of  validity.  Though  no 
two  human  organisms  are  identical  in  structure,  all  human  or- 
ganisms within  a  wide  range  of  environment  are  so  similar  in  the 
kinds  of  food,  air  and  other  material  goods  which  they  require, 
that  it  is  sound  'social  policy'  to  ignore  their  differences  and  to 
treat  them  as  identical  in  the  qualities  of  their  demands  and 
dissimilar  only  in  the  quantities.  The  practical  economy  of 
'markets'  stands  upon  this  basis,  and  the  quantitative  treat- 
ment finds  its  true  justification  in  the  utility  of  markets.  There 
can  be  no  market  for  the  single  or  'singular'  consumer.  A  mar- 
ket, i.  e.  a  practical  instrument  for  measurement  of  economic 
wants,  implies  a  standardisation  of  the  desires  of  buyers  and 
sellers.  Just  so  far  as  the  members  of  an  economic  community 
are  thus  standardised  in  their  preferences,  are  economic  laws 
applicable.  Thus,  for  the  scientific  interpretation  of  such  a  com- 
munity, much  depends  upon  the  relative  strength  and  impor- 
tance of  the  standardising  and  the  individualising  forces.  In  a 
society  where  the  so-called  '  arts '  of  industry  and  of  consumption 
have  alike  passed  by  imitation  or  tradition  into  firm  conventions 
from  which  the  least  transgression  is  branded  as  an  impiety  or  a 
wickedness,  economic  laws,  based  upon  a  sufficient  study  of  the 
past  and  present,  will  enable  one  to  predict  the  future  with  con- 
siderable accuracy.  Primitive  or  backward  communities  are 
usually  in  this  conservative  condition.  Moreover,  as  they  ad- 
vance and  become  economically  progressive,  it  is  observable  that 
the  most  conservative  and  most  calculable  wants  and  activities 
are  those  relating  to  the  satisfaction  of  the  primary  material 
needs.  Hence  it  is  evident  that  scientific  predictions,  based 
either  upon  general  considerations  of  human  nature  or  upon  past 
measurements,  will  come  nearest  to  fulfilment,  according  as  they 
relate  to  the  production  and  consumption  of  those  articles  most 
deeply  embedded  in  the  standard  of  living.  Conveniences  and 
comforts  are  more  changeable  than  necessaries,  and  luxuries  most 


344  WORK  AND  WEALTH 

changeable  of  all.  Now  the  marginal  or  least  useful  portion  of 
those  supplies,  which  in  the  earlier  or  most  useful  increments 
satisfy  some  prime  need,  are  often  luxuries.  The  marginal  portion 
of  the  wheat  supply  goes  for  cakes,  or  is  thrown  into  the  dust-bin 
as  waste  bread:  the  marginal  oil  goes  into  motor  rides.  Taking 
expenditure  in  general,  we  find  the  last  ten  per  cent  of  every  in- 
come most  incalculable  in  its  outlay,  because  it  represents  those 
purchases  in  which  custom  is  weakest  and  individual  taste  or 
opportunity  the  strongest.  In  a  word,  it  is  precisely  in  those  eco- 
nomic actions  which  express  marginal  preferences,  the  pivot  of 
the  mechanical  calculus,  that  we  find  the  maximum  of  insta- 
bility and  incalculability.  For  each  of  these  nice  marginal  pre- 
ferences proceeds  directly  from  the  changing  nature  of  the  organic 
personality.  Whereas  fifty  per  cent  of  a  man's  expenditure  may 
express  the  common  satisfaction  of  the  fixed  physical  needs 
which  custom  has  embedded  in  a  standard  of  subsistence,  thirty 
per  cent  the  lighter  but  fairly  stable  comforts  belonging  to  his 
class,  the  last  twenty  per  cent  is  the  part  in  which  he  expresses 
his  individual  character  and  his  cravings  for  personal  distinction 
and  variety  of  enjoyment. 

The  formal  invalidity  of  the  'marginalist'  method  has  already 
been  disclosed.  The  considerations  just  adduced  indicate  its 
practical  futility  as  a  means  of  guidance  for  economic  art.  Nei- 
ther as  a  deductive  nor  as  an  inductive  science  can  Economics 
furnish  accurate  rules  for  calculating  or  directing  future  economic 
events.  It  can  only  prophesy  within  such  limits  as  are  set  by  the 
assumptions  of  the  stability  of  human  nature  and  of  its  environ- 
ment. Its  rules  or  'laws'  will  best  interpret  and  predict  those 
economic  actions  which  are  most  remote  from  the  margin,  i.  e. 
those  which  are  most  conservative  or  regular.  Marginal  prefer- 
ences will  therefore  be  precisely  those  which  it  is  precluded  from 
interpreting  or  predicting  by  the  necessary  defect  of  the  intellect- 
ual instrument. 

§  12.  Thus  the  final  futility  of  the  mechanical  method  of  mar- 
ginalism lies  in  its  insistence  upon  applying  a  quantitative  method 
of  interpretation  to  the  most  qualitative  portion  of  the  subject- 
matter,  that  portion  where  the  organic  conditions  of  personality 
and  novelty  are  of  paramount  significance. 


SOCIAL  SCIENCE  AND  SOCIAL  ART  345 

Indeed,  it  is  for  this  reason  that  economic  science,  though  able 
to  supply  relevant  and  important  evidence,  can  never  solve  con- 
clusively any  social-economic  problem,  even  in  that  field  of  action 
where  her  authority  is  most  strongly  asserted.  A  given  rise  or 
fall  of  price  can  never  produce  the  same  effect  upon  demand 
twice  running.  Why?  Because  the  desires  and  beliefs  of  the 
more  unsettled  section  of  buyers,  the  'marginal'  buyers,  will  have 
changed.  Nor  can  this  alteration  in  effect  upon  demand  be  cal- 
culated. Why  not?  Because  the  changes  in  desires  and  be- 
liefs are  organic  qualitative  changes.  Observations  of  past  price- 
movements  and  laws  based  upon  them  are  not  thereby  rendered 
useless.  For  these  organic  changes  will  often  be  negligible  so 
far  as  the  bulk  of  the  market  is  concerned.  But  they  negate  the 
possibilities  of  exact  prediction,  and  often  of  approximate  pre- 
dictions on  the  margin. 

This  is  why  the  'great'  business  man  often  prefers  to  act  by 
intuition  than  by  express  calculation.  He  recognises  that,  so  far 
as  the  more  delicate  judgments  are  concerned,  his  'feeling'  of 
'  how  things  will  go '  is  more  trustworthy  than  any  estimate.  He 
does  not  act  blindly.  He  feeds  and  fortifies  his  mind  with  facts 
and  figures,  until  he  is  steeped  in  familiarity  with  the  subject- 
matter.  But  he  does  not  deliberately  balance  against  one  another 
these  measured  forces  and  commit  himself  to  the  resultant.  For 
he  is  aware  that  the  problem  is  not  one  of  mere  mechanics,  a 
counting-house  proposition,  but  one  involving  for  its  solution 
sympathy  and  imagination. 

But  the  crucial  instance  of  the  organic  and  spiritual  nature  of 
a  distinctly  economic  problem  is  in  the  case  of  credit.  The  math- 
ematical mechanical  treatment  claims  to  find  its  supreme  justi- 
fication in  the  part  played  by  money,  the  most  abstract  of  eco- 
nomic phenomena.  Credit,  in  its  objective  sense,  is  the  economic 
plenipotentiary,  the  absolute  representative  of  economic  power. 
For  he  who  has  credit  has  the  command  of  land,  capital,  labour, 
ability  of  every  sort,  at  any  time  and  in  any  place.  Credit  is  pro- 
ductive power  and  purchasing  power,  for  he  who  possesses  it  can 
convert  it  into  any  sort  of  supply  or  demand  he  chooses.  It  is 
absolutely  quantitative,  fluid,  divisible  and  measurable.  Such 
is  credit,  treated  objectively  by  economic  science.  But  credit 


346  WORK  AND  WEALTH 

is  also  the  heart  and  brains  of  the  industrial  system.  Subjec- 
tively regarded,  it  is  an  essentially  spiritual  thing,  a  delicate, 
sensitive  creature  of  human  beliefs  and  desires.  Its  volume  and 
its  power  for  practical  work  are  affected  by  this  spiritual  nature. 
For  its  springs  are  fear,  hope,  prestige,  superstition,  sympathy 
and  understanding.  Its  true  basis  is  neither  gold,  nor  goods, 
but  credibility.  And  that  quality  of  credibility  is  fluctuating 
all  the  time  for  every  individual,  every  business,  every  state. 
New  unpredictable  events  are  constantly  affecting  it.  No  one 
can  therefore  say  with  any  assurance  of  correctness  "a  Bank 
should  keep  20%  of  its  resources  in  reserve  or  at  call,"  or  put 
any  such  rigid  limit  for  the  operations  of  any  Bank.  If  we  do 
set  any  such  quantitative  limit,  we  should  realise  that  it  is  only  a 
rough  practical  rule,  which,  if  interpreted  with  automatic  rigour, 
leads  to  waste  and  error  in  the  actual  working  of  finance.  For  by 
no  plotting  of  curves  can  you  reckon  the  future  flow  of  human 
credibility,  or  the  application  of  a  given  amount  of  concrete 
credit  to  the  ever-changing  gains  and  risks  of  human  industry. 
Take  the  critical  case  of  a  collapse  of  credit  and  the  run  upon  a 
Bank.  To  predict  with  even  approximate  accuracy  the  course  of 
such  a  run,  or  to  check  it  by  calculations,  based  upon  past  expe- 
rience of  similar  crises  applied  to  the  records  of  present  assets  and 
liabilities,  would  be  impossible.  Why?  Chiefly  because  of  the 
psycho-physical  factors,  the  play  of  organic  forces.  You  can 
calculate  with  close  exactitude  the  strain  imposed  upon  a  bridge 
of  a  given  size,  material  and  structure  by  a  given  weight,  dis- 
tribution and  pace  of  traffic.  You  cannot  calculate  with  equal 
exactitude  the  strain  which  a  given  quantity  of  liabilities,  how- 
ever carefully  analysed  and  graded,  will  impose  upon  a  Bank  re- 
serve of  a  given  size. 

The  incalculable  element  consists  of  organic  novelty,  the 
changes  due  to  having  to  deal  with  matter  not  dead  and  homo- 
geneous but  living  and  organised.  The  citation  of  such  instances 
is  not  designed  to  prove  that  monetary  and  other  statistics  are 
practically  useless  for  the  prediction  and  solution  of  social- 
economic  problems.  On  the  contrary,  they  are  exceedingly  use- 
ful. But  the  formal  exactitude  which  they  carry  in  their  method 
can  never  be  conveyed  into  the  work  they  are  required  to  assist 


SOCIAL  SCIENCE  AND  SOCIAL  ART  347 

in  doing.  The  most  abundant  supply  of  the  most  accurate  sta- 
tistics, utilised  by  the  most  approved  methods  of  economic 
science,  can  only  afford  results  of  a  rude  approximate  validity, 
expressed  in  tendencies.  The  practical  man  in  business,  in  poli- 
tics, in  every  mode  of  social  conduct,  will  supplement  and  correct 
the  application  of  the  scientific  rule  by  the  play  of  private  judg- 
ment and  intuition. 

*        *        * 

§  13.  If  this  is  true  as  regards  all  predictions  of  future  economic 
happenings,  it  is  still  more  true  of  the  conscious  purposive  guid- 
ance of  these  happenings  by  the  application  of  a  human  standard 
of  values.  The  practical  statesman  or  social  reformer,  confronted 
with  a  concrete  social  problem,  e.  g.  the  demand  for  a  state 
enforcement  of  a  national  minimum  of  wages,  local  option  for 
the  closure  of  public  houses,  or  a  referendum  for  constitutional 
changes,  will  find  himself  'paying  attention'  and  'giving  weight' 
to  a  number  of  diverse  and  opposing  considerations.  How  will  the 
selection  and  the  'weighing'  of  these  considerations  be  brought 
about?  Not  directly  and  consciously  by  the  application  of  what 
may  be  termed  his  social  ideal,  the  image  in  his  soul  of  the  society 
which  seems  to  him  absolutely  the  most  desirable.  The  relation 
of  that  ultimate  ideal  to  the  particular  scheme  under  considera- 
tion, e.  g.  a  national  minimum  wage,  may  be  too  distant  and  too 
dubious  to  afford  valuation  and  direction.  The  operative  ideal 
will  be  derivative,  one  of  a  related  set  of  possible-desirables, 
limited  and  practicable  ideals  which  form  the  most  potent  in- 
struments of  his  statecraft.  Such  an  operative  ideal  for  an 
Englishman  at  the  present  time  might  be  the  vision  of  the  State, 
as  the  collective  will,  securing  by  law  a  clearly  conceived  standard 
of  sound  efficient  life  for  the  ordinary  working-class  family.  This 
present  practical  ideal,  derived  from  a  wider  conception  of  the 
duty  of  the  State  in  relation  to  the  individual  members  of  a  civi- 
lised society,  would  itself  be  a  far  wider  scheme  than  the  partic- 
ular proposal,  that  of  national  minimum  wage,  which  it  was 
invoked  to  assess.  The  statesman,  enlightened  by  this  deriva- 
tive ideal,  would  apply  it  as  a  test  and  standard  to  the  particular 
proposal.  He  would  consider  it,  not  merely  'upon  its  own  merits ' 
but  as  incorporated  in  the  more  complex  organic  plan  of  his 


348  WORK  AND  WEALTH 

national  minimum.  This  organic  plan  and  purpose  would  de- 
termine the  'value'  he  gave  to  the  various  'pros'  and  'cons,'  as 
for  instance  to  the  consideration  how  far  legal  intervention  might 
weaken  the  private  organisation  of  workmen  in  their  trade-unions, 
so  damaging  other  benefits  of  trade-unionism,  or  the  considera- 
tion how  far  it  was  better  to  wait  and  secure  a  more  demo- 
cratically administered  State  before  entrusting  it  with  the  delicate 
function  of  adjusting  pecuniary  arrangements  between  workmen 
and  employers.  This  plan  or  purpose  of  a  national  minimum, 
as  a  possible  desirable,  will  of  course  not  remain  quite  stable  in 
his  mind,  will  not  be  a  rigid  standard.  It  will  change  somewhat 
in  pattern,  and  in  defmiteness  of  outline,  as  some  fresh  outer  or 
inner  experience  makes  any  part  of  it,  or  the  whole,  seem  more 
or  less  desirable,  or  more  or  less  possible,  than  formerly. 

§  14.  But  the  important  point  to  note  is  that  it  is  this  larger 
organic  plan  or  vision,  the  character  and  changes  of  which  are 
essentially  qualitative,  that  furnishes  the  standard  and  stamps 
with  their  respective  'values'  the  various  considerations  which 
are  said  to  'determine'  the  practical  value  of  the  proposal  and 
its  acceptance  or  rejection.  No  social-economic  proposal,  how- 
ever distinctively  quantitative  it  appears,  can  be  humanly  val- 
ued in  any  other  way.  It  is  for  this  reason  that  a  mere  econo- 
mist is  always  disabled  from  giving  practical  advice  in  any  course 
of  conduct.  Take  two  examples.  Political  economy  can  legi- 
timately apply  laws  of  value  so  as  to  show  that,  under  competi- 
tive conditions,  a  nation  must  produce  a  larger  quantity  of  mar- 
ketable goods  under  a  policy  of  free  imports  than  under  any  sort 
of  Tariff.  But  that  proof  in  itself  can  never  be  sufficient  ground 
for  rejecting  either  a  Tariff  for  revenue,  or  even  a  Tariff  for  pro- 
tection. For  the  Statesman  can  never  take  the  maximum  of 
marketable  values  as  his  final  and  sufficient  test.  If  it  could  be 
shown  that  national  security  were  involved  in  a  protective  system 
which  kept  all  necessary  industries  within  the  national  limits,  he 
might  plead  '  defence  is  more  than  opulence. '  Or,  if  it  could  be 
shown  that  a  protective  tariff  could  be  operated  so  as  to  distrib- 
ute a  slightly  reduced  aggregate  of  wealth  in  a  manner  more 
conducive  to  the  popular  welfare  and  that  this  consideration  was 
not  offset  by  fear  of  corruption  or  of  impaired  industrial  efficiency, 


SOCIAL  SCIENCE  AND  SOCIAL  ART  349 

or  other  disadvantages,  the  Statesman  might  rightly  adopt  a 
Tariff  in  the  teeth  of '  economic  laws. ' l 

Or,  take  another  example,  the  proposal  for  an  eight  hours  day, 
secured  by  law.  A  purely  economic  enquiry  might,  by  consider- 
ing the  elasticity  of  labour  in  various  employments,  arrive  at  the 
conclusion  that  a  general  shortening  of  the  work-day  would  involve 
a  present  reduction  of  the  product  by  so  much  percentage  in  dif- 
ferent trades,  and  that  it  might  involve  a  reduction  of  profits  and 
of  wages  and  a  probable  loss  of  so  much  export  trade  in  various 
industries.  It  might  even  present  some  tentative  estimates  as  to 
the  effects  of  the  pressure  of  this  new  cost  of  production  in  stimu- 
lating improved  economies  in  mines,  factories  or  railways.  Such 
information  would  be  useful  and  relevant,  but  not  authoritative 
upon  the  judgment  of  the  Statesman.  For  the  social  value  of  a 
shorter  work-day  would  depend  mainly  upon  the  organic  reactions 
of  increased  leisure  upon  the  whole  standard  of  life  of  the  working 
family,  how  it  affected  his  expenditure  of  his  wages,  its  effect 
upon  his  health,  education  and  recreations,  the  cultivation  of 
family  affection,  the  better  performance  of  neighbourly  and  civic 
duties,  and  all  that  is  involved  in  more  liberty  and  a  larger  out- 
look upon  life.  It  is  evident,  in  the  first  place,  that  these  essential 
considerations  lie  outside  the  calculations  of  the  economist,  and, 
secondly,  that  the  actual  value  set  on  each  of  them  will  depend 
upon  and  be  derived  from  the  whole  faith  and  social  vision  of 
the  statesman  in  question. 

This  social  or  human  valuation  of  a  so-called  economic  process 
or  good,  involves  then  two  departures  from  a  quantitative  calcu- 
lus; first,  the  reduction  of  the  particular  economic  factors  them- 
selves from  financial  or  other  quantitative  terms  to  vital  or  sub- 
jective terms;  secondly,  the  restoration  of  this  artificially  severed 
economic  process  to  the  larger  integrated  process  of  human  life 
from  which  it  was  abstracted  by  the  scientific  specialism  of  the 
economist.  The  economist  can  find  the  facts,  but  he  cannot  find 
their  human  importance  or  value,  because  assigning  human  value 

1  Protectionists  can  seldom,  if  ever,  plead  successfully  either  of  these  cases.  By 
reducing  the  community  of  economic  interests  between  nations  Protection  normally 
increases  the  chances  of  war,  while  lessening  the  national  resources  which  are  the 
sinews  of  war.  So,  likewise,  its  normal  tendency  is  to  worsen  the  distribution  of 
wealth  within  the  nation. 


350  WORK  AND  WEALTH 

means  referring  to  an  extra-economic  standard.  It  means  more 
than  this.  It  means  a  reference  to  an  extra-scientific  standard, 
one  whose  distinctive  character  consists  in  its  being  the  expression 
and  operation  of  the  organic  complex  of  forces  composing  the 
social  personality  as  mirrored  in  the  conscious  or  unconscious 
efforts  of  the  individuals  and  of  the  Society  who  make  the  valua- 
tions and  frame  their  conduct  upon  them. 

§  15.  In  conclusion  it  is  necessary  to  enforce  an  exceedingly 
important  distinction  in  the  conception  of  social  or  human 
valuation.  The  term  means  two  things,  the  attribution  of  human 
or  social  value  by  an  individual  and  by  a  society.  In  most  of  our 
illustrations  we  have  taken  the  standpoint  of  the  Statesman  or 
the  reformer,  or  of  some  other  person,  and  regarded  social  values 
from  his  eyes.  We  have  taken  his  ideal  as  a  social  ideal.  So  it 
is  in  the  sense  of  being  his  ideal  of  a  society.  But  it  is  essential 
also  to  consider  society  as  seeking  to  realise  its  own  ideal.  'The 
whole  succession  of  men  during  many  ages/  said  Pascal,  'should 
be  considered  as  one  Man,  ever  living  and  constantly  learning.' 
This  is  the  true  organic  view  of  humanity,  regarded  either  as  a 
single  whole  or  in  its  several  races,  nations  or  communities.  The 
apophthegm  is  not  primarily  of  political  or  of  ethical  significance, 
but  a  statement  of  natural  history.  It  is  corroborated  in  a 
striking  manner  by  modern  biological  teaching,  with  its  continuity 
of  the  germ-plasm,  its  embryonic  recapitulation  and  its  specific 
evolution.  But  not  until  natural  history  is  rescued  from  the 
excessive  domination  of  a  purely  physical  biology,  and  is  read  in 
the  language  of  collective  psycho-physics,  do  we  grasp  the  full 
bearing  of  the  organic  conception  in  its  application  to  a  society. 
For  this  conception  of  mankind  as  working  out  the  human  career 
by  the  operation  of  its  original  supply  of  faculties  and  feelings, 
in  which  instinctive  physical  motives  take  an  increasing  admix- 
ture of  conscious  rational  guidance,  is  the  key  to  an  understand- 
ing of  the  ascent  of  man.  There  is  no  clear  evidence  of  the  con- 
tinuous ascent  of  man  regarded  as  individual,  at  any  rate  within 
'historic'  times.  There  is  evidence  of  the  ascent  of  human  so- 
ciety towards  a  larger  and  closer  complexity  of  human  relations 
and  a  clearer  intellectual  and  moral  consciousness.  This  means 
that  mankind,  as  a  whole,  and  its  several  societies,  is  becoming 


B 


SOCIAL  SCIENCE  ANTTS^CIAL  ART  351 

more  capable  of  a  human  valuation  and  of  a  collective  conduct  of 
affairs  guided  by  this  conscious  process.  In  politics,  regarded 
in  its  wider  meaning,  this  truth  has  taken  shape  in  the  modern 
conception  of  the  general  will,  which  in  popularly-governed 
States  functions  through  public  opinion  and  representative  in- 
stitutions. Following  our  examination  of  the  limits  of  science  or 
'rationalism'  in  the  processes  of  valuation  and  of  conduct  on  the 
part  of  individuals,  we  shall  expect  to  find  some  corresponding 
limits  in  collective  man.  In  other  words,  the  general  will  of  a 
people  cannot  be  regarded,  either  in  its  estimates  or  its  deter- 
minations, as  a  merely  or  a  mainly  calculative  process,  working 
out  the  respective  values  of  existing  circumstances,  or  proposed 
changes,  in  terms  of  clearly-defined  utility.  It  does  not  even 
with  fuller  information,  wider  education  and  firmer  self-control, 
tend  towards  this  scientific  politics.  Collective  self-government, 
like  individual  self-government,  will  always  remain  essentially 
an  art,  its  direction  and  determinant  motives  being  creative, 
qualitative,  and  rooted  in  the  primal  instincts  of  man. 

§  1 6.  It  is  upon  this  conception  of  the  collective  instincts  of 
society  regarded  as  an  organism  that  a  rational  faith  in  demo- 
cracy is  based.  The  animal  organism,  itself  a  society  of  cells,  is 
endowed  with  energy  of  body  and  mind,  operating  through  an 
equipment  of  instinctive  channels  towards  its  own  survival  and 
development  and  the  survival  and  development  of  its  species. 
Where  there  is  danger  lest  too  much  of  this  energy  should  be  con- 
sumed upon  individual  ends,  too  little  on  specific  ends,  the  social 
or  self-sacrificing  instincts  are  strengthened  in  the  individual, 
and  are  reinforced  by  the  herd  or  specific  feelings  of  other  indi- 
viduals, as  where  plunderers  of  the  common  stock  or  shirkers  in 
the  common  tasks  are  destroyed  by  the  hive  or  herd.  The  in- 
stinct for  the  survival  and  development  of  the  hive,  herd  or 
species,  cannot  be  satisfactorily  explained  as  belonging  only  to  the 
psycho-physical  equipment  of  the  individual  members.  On 
this  basis,  viz.  that  of  attributing  a  social  nature  only  to  the 
individual  members  of  a  society,  the  acts  of  devotion  and 
self-sacrifice,  and  still  more  the  acts  of  preparatory  skill,  the 
elaborate  performance  of  deeds  that  are  means  to  the  sur- 
vival and  well-being  of  a  future  generation,  become  mere  hap- 


352  WORK  AND  WEALTH 

hazard  miracles.  Take  the  familiar  example  of  the  Hunting 
Wasp. 

'The  larvae'of  the  various  Hunting  Wasps  demand  a  motionless  prey  who 
will  not,  by  defensive  movements,  endanger  the  delicate  egg  and,  afterwards, 
the  tiny  grub  fixed  to  a  part  of  the  prey.  In  addition,  it  is  necessary  that  this 
inert  prey  shall  be  nevertheless  alive;  for  the  grub  would  not  accept  a  corpse 
as  food.  Its  victuals  must  be  fresh  meat  and  not  preserved  provisions. 
These  two  antagonistic  conditions  of  immobility  and  life  the  Hymenoptera 
realises  by  means  of  paralysis,  which  destroys  movement  and  leaves  the 
organic  principle  of  life  intact.  With  a  skill  which  our  most  famous  vivisec- 
tors  would  envy,  the  insect  drives  its  poison  sting  into  the  nerve  centres,  the 
seat  of  muscular  stimulation.  The  operator  either  confines  himself  to  a  single 
stroke  of  the  lancet,  or  else  gives  two,  or  three  or  more,  according  to  the 
structure  of  the  particular  nervous  system  and  the  number  and  grouping  of 
the  nerve  centres.  The  exact  anatomy  of  the  victim  guides  the  needle.' 1 

Such  conduct  is  not  made  intelligible  by  any  other  hypothesis 
than  that  of  a  collective  life  of  the  species,  the  individual  lives 
being,  in  fact,  parts  of  a  common  specific  life  towards  which  they 
contribute  in  a  manner  similar  to  that  in  which  the  cells,  with 
their  particular  lives,  contribute  to  the  life  of  their  organism. 
Only  by  this  application  or  extension  of  the  'organic  metaphor' 
to  the  relations  between  members  of  an  existing  generation,  and 
between  successive  generations,  can  we  construct  an  intelligible 
sequence  of  causation  between  these  preparatory  acts  of  indi- 
vidual insects  of  one  generation  and  the  results  accruing  to  other 
individuals  of  another  generation. 

This  'general  will'  (may  we  not  call  it  so?),  urging  the  indi- 
viduals to  the  fulfilment  of  a  purpose  which  is  but  slightly  theirs, 
and  is  not  mainly  that  of  the  existing  generation,  but  which  em- 
bodies the  general  purpose  of  the  species  or  some  wider  purpose  of 
a  still  larger  organic  whole,  can  only  be  realised  for  thought  and 
feeling  as  a  single  current  of  will  implying  and  conferring  unity  of 
life  upon  the  species  or  the  larger  unity. 

In  'lower'  animal  spheres  we  recognise  this  fact.  But  there  is 
a  tendency  to  hold  that  man,  subject  to  some  such  specific  urge  or 
instincts  in  his  primitive  stages,  has  become  more  and  more  indi- 
vidualised and  has  done  so  largely  by  becoming  more  rational. 
The  gradual  displacement  of  instinct  by  reason,  it  is  contended, 
has  made  man  more  self-sufficient,  his  life  more  of  the  nature  of  an 

1  Henri  Fabre,  The  Eng.  Review,  Dec.,  1912,  The  Modern  Theory  of  Instincts. 


SOCIAL  SCIENCE  AND  SOCIAL  ART  353 

end,  less  of  a  means  towards  the  life  of  his  tribe  or  nation,  or  even 
towards  that  of  humanity  as  a  whole.  Is  this  so?  There  are  two 
issues  that  open  here.  In  the  process  of  civilisation  a  man  cer- 
tainly becomes  more  individual.  He  differs  in  character  more 
from  his  fellows  than  in  earlier  times;  he  is  able  to  devote,  and 
does  devote,  a  larger  share  of  his  energies  of  body  and  mind  to 
activities  which  are  primarily  self-regarding.  Moreover,  he 
tends  to  rely  less  exclusively  or  predominantly  upon  what  would 
be  called  his  instincts  and  more  upon  his  reason. 

§  17.  The  'general  will',  which  through  forms  of  tribal  custom 
and  of  gregarious  instinct  pulsed  so  vigorously  and  so  insistently 
in  tribal  life,  seems  to  have  weakened  with  every  expansion  of 
social  area  and  with  the  advancing  complexity  of  social  relations. 
The  economy  of  human  energy  allows  individuals  to  apply  a 
larger  share  of  the  life-force  that  flows  through  them  to  what 
appear  to  them  their  private  purposes,  a  smaller  to  the  protec- 
tion and  development  of  the  society  or  species.  If  we  were  to 
assign  any  final  validity  to  the  opposition  of  individual  and  so- 
ciety, this  change  might  be  regarded  as  a  shrinkage  of  the  domin- 
ion of  the  'general  will,'  the  specific  as  contrasted  with  the  indi- 
vidual purpose.  But  though  the  narrow  intense  tribal  will  may 
thus  appear  to  have  yielded  to  a  broader,  feebler  and  less  im- 
perative form  of  national  or  social  will,  it  by  no  means  follows 
that  this  latter  works  less  effectively  for  the  common  good.  As 
man  becomes  more  intelligent  and  more  reflective,  and  has  for- 
tified himself  with  larger  and  more  reliable  records  and  better 
methods  of  controlling  his  environment,  the  instinctive  operations 
of  the  will  of  groups  of  tribal  animals  give  place  to  more  conscious, 
more  rational,  purposes. 

The  change  must  not  indeed  be  over-stressed.  The  validity  of 
the  general  will  does  not  depend  upon  the  degree  of  conscious 
rational  purpose  it  has  attained.  It  remains  to-day  in  the  most 
highly  civilised  communities  what  it  was  in  primitive  tribal  life, 
an  organic  instinct.  The  rationalisation  of  this  blind  faculty  of 
organic  self-protection  and  advancement  has  not  yet  gone  very 
far.  Indeed,  it  is  exceedingly  important  to  recognise  that  an 
organic  instinct  of  conservation  and  of  progress  underlies  the 
wisdom  of  the  people.  Those  who  consider  politics  a  rightful 


354  WORK  AND  WEALTH 

monopoly  of  the  educated  classes  doubly  err;  first,  in  ignoring 
the  instinctive  wisdom  of  the  people,  secondly  in  claiming  for 
education  a  higher  value  for  political  direction  than  it  possesses. 
The  political  wisdom  of  the  Roman  or  the  Germanic  peoples  par- 
takes far  more  of  a  natural  sagacity  than  of  a  reasoned  process. 
If  this  applies  to  the  great  statesman,  it  is  still  more  applicable  to 
the  body  of  the  people  whose  consent  or  active  cooperation  con- 
tributes to  the  evolution  of  a  stable  and  a  progressive  state. 
It  is  impossible  to  understand  or  to  explain  any  long  and  complex 
movement  in  national  history  by  piecing  together  the  conscious 
rational  designs  of  the  individuals  or  groups  of  men  who  executed 
the  several  moves  of  which  the  movement  seemed  to  consist. 
Such  a  structure  as  the  British  Constitution,  such  an  episode  as 
the  French  Revolution,  cannot  be  otherwise  regarded,  in  its 
organic  unity,  than  as  a  product  of  energies  of  common  will  and 
purpose,  wider,  deeper  and  obscurer  in  their  working  than  the 
particular  intelligible  motives  and  aims  which  appeared  on  the 
stage  of  parliamentary  debates,  military  campaigns  or  mob  vio- 
lence. Every  student  of  the  ' spirit'  of  one  of  these  great  national 
dramas  is  driven  to  recognise  some  moulding  or  directing  influ- 
ence, some  urge  of  events,  by  which  they  seem  to  unfold  them- 
selves in  a  larger  and  more  complex  pattern  or  consistency  than 
is  perceived  by  any  of  the  agents.  There  is  sometimes  a  tendency 
to  give  a  mystical  interpretation  to  this  truth.  So  Victor  Hugo 
writes  of  the  French  Revolution: 

'fetre  un  membre  de  la  Convention,  c 'etait  etre  une  vague  de  1 'Ocean. 
Et  ceci  etait  vrai  des  plus  grands.  La  force  d'impulsion  venait  d'en  haut. 
II  y  avait  dans  la  Convention  une  volonte  qui  etait  celle  de  tous  et  n  'etait 
celle  de  personne.  Cette  volonte  etait  une  idee,  idee  indomptable  et  de- 
mesuree  qui  soufflait  dans  Pombre  du  haut  du  ciel.  Nous  appelons  cela  la 
Revolution.  Quand  cette  idee  passait  elle  abattait  1'un  et  soulevait  Pautre; 
elle  emportait  celui-ci  en  6cume  et  brisait  celui-la  aux  ecueils.  Cette  idee 
savait  ou  elle  allait,  et  poussait  le  gouffre  devant  elle.  Imputer  la  revolution 
aux  hommes,  c'est  imputer  la  maree  aux  flots.'  "• 

The  explanation  of  our  colonial  empire  as  the  result  of  a  career 
of  conquest  and  expansion  conducted  'in  a  fit  of  absence  of  mind' 
is  an  exact  statement  of  the  truth.    For  though  a  few  great  empire- 
builders,  such  as  Warren  Hastings,  Molesworth,  Elgin,  Grey  and 
1  Quaire-vingt-treize,  Livre  III,  Chapter  XI. 


SOCIAL  SCIENCE  AND  SOCIAL  ART  355 

Rhodes,  may  have  played  their  parts  with  some  measure  of  con- 
scious design,  the  individual  channels  of  this  current  of  adven- 
turous and  constructive  energy  embodied  in  the  general  process 
had  as  little  an  idea  of  the  imperial  edifice  as  any  working  bee  of 
the  great  symmetrical  structure  of  the  hive. 

§  1 8.  This  sense  of  'manifest  destiny'  is  surely  no  illusion. 
It  is  the  evolutionary  method  by  which  all  organic  process  is 
achieved,  whether  in  the  growth  of  an  oak  tree  from  its  acorn,  of 
a  motor  car  from  the  earliest  hand-barrow,  a  musical  symphony 
from  a  savage  tom-tom,  or  a  modern  federal  state  from  the  prim- 
itive tribal  order.  In  every  case  a  number  of  what  seem  separately 
motived  actions  are  seen  to  carry  and  express  the  continuity  of 
some  common  tendency  which  brings  them  under  the  control  of 
a  single  collective  design.  This  wider  purpose  is  seen  operating 
upon  the  larger  organic  stage  of  conduct  in  ways  closely  analogous 
to  the  operations  of  the  poet  or  the  artist  in  any  human  fine  art. 
It  exhibits  the  urge  of  an  inner  flow  of  psycho-physical  energy 
seeking  ever  finer  modes  of  expression  by  moulding  the  materials 
at  its  disposal.  As  soon  as  we  grasp  this  idea  of  the  collective 
artistry  of  a  species  or  any  other  organic  group,  we  recognise 
how  lacking  in  logical  finality  is  the  accepted  antithesis  of  in- 
stinct and  reason.  The  reason  of  the  organism  will  appear  as  a 
blind  instinctive  drive  to  the  cell  whose  conduct  it  directs.  So 
the  specific  purpose  will  show  itself  as  instinct  in  the  individual 
organism,  though  it  may  be  neither  blind  nor  unconscious  to  the 
species  taken  as  the  organic  unit.  Nay,  we  may  go  further  and 
suggest  that  advancing  reason  in  the  individual  animal  may  con- 
sist in  a  growing  sympathy  and  syn-noesis  with  the  operations  of 
the  wider  organism.  Must  not  this  be  what  happens  when  what 
we  term  reason  endorses  and  reinforces  the  instinctive  actions  of 
specific  preservation  and  well-being,  substituting  reflection  for 
impulse,  plans  for  customs,  orderly  and  changing  institutions 
for  blind  ordinances  whose  authority  is  gregarious  imitation  or 
superstitious  prestige?  Are  we  wrong  when  we  trace  an  instinct 
of  obedience  to  a  chief  transformed  into  a  reasoned  submission 
to  the  law?  May  not  then  the  whole  process  of  the  rationalisation 
of  man  be  regarded  as  a  bringing  of  the  individual  man  into  vital 
communion  of  thought  and  feeling  with  the  thoughts  and  feelings 


356  WORK  AND  WEALTH 

of  the  race,  of  humanity,  perhaps  of  the  larger  organic  being  of  the 
kosmos?  For  a  man  only  becomes  rational  so  far  as  he  takes  a 
disinterested  view  of  himself,  his  fellow-men  and  of  the  world  he 
lives  in,  and  the  wider,  closer,  keener  that  view  the  more  rational 
he  becomes.  Thus  the  evolution  of  the  mind  of  man  into  a 
fuller  rationality  means  the  strengthening  and  clarifying  of  those 
relations  of  feeling  and  thought  which  bind  him  to  his  fellows 
and  to  his  world  and  which  are  rooted  in  the  'blind'  instincts  of 
gregarious,  superstitious,  curious  man. 

§  19.  The  upshot  of  these  considerations  is  to  break  down  the 
abruptness  of  the  contrast  between  reason  and  instinct  and  to 
recognise  in  reason  itself  the  subtlest  play  of  the  creative  in- 
stinct. The  'disinterested'  nature  of  the  search  for  truth  has 
been  a  subject  of  derision  among  some  thinkers,  who  see  no  way 
by  which  man  the  individual  can  disengage  himself  from  the 
selfish  motives  which  seem  to  rule  him  and  to  dispose  alike  of  his 
emotional  and  intellectual  energies.  In  man  regarded  as  indi- 
vidual it  is  very  difficult  to  recognise  any  possibility  of  a  dis- 
interested motive,  because  all  such  motives  are  ruled  out  ex 
hypothesi.  But  regard  the  individual  man  as  subject  to  the  dom- 
inant control  of  some  wider  life  than  his,  that  of  race,  society, 
humanity  or  kosmos,  and  the  difficulty  disappears.  He  becomes 
capable  of  'disinterested'  curiosity,  'disinterested'  love,  'self- 
sacrifices'  of  various  kinds,  because  he  is  a  centre  of  wider  in- 
terests than  those  of  his  own  particular  self.  The  action  of  a 
Japanese  who  throws  himself  upon  the  Russian  bayonets  at  the 
word  of  command,  of  a  doctor  who  inoculates  himself  with  a 
deadly  poison  for  the  sake  of  science,  the  steady  lifelong  toil  of 
millions  of  peasants  growing  the  food  supply  for  unknown  mil- 
lions of  town-dwellers,  are  no  longer  'disinterested'  when  they 
are  looked  at  from  the  standpoint  of  the  interests  of  humanity 
as  a  whole.  This  collective  will  and  intelligence  can  never  be 
considered  wholly  'blind'  when  regarded  from  the  collective 
standpoint.  Every  directive  instinct  of  an  organism,  at  any  rate 
in  the  animal  world,  must  be  accredited  with  some  related  emo- 
tion1, and  this  emotion,  regarded  as  a  fact  in  consciousness,  must 
be  accredited  with  some  measure  of  intelligence.  The  creature 
1  Cf.  McDougall,  Social  Psychology. 


SOCIAL  SCIENCE  AND  SOCIAL  ART  357 

subject  to  the  drive  of  an  emotion  must  have  some  idea  of  what 
he  is  about,  though  the  full  psycho-biological  'purpose'  of  his 
action  may  be  hidden  from  him.  This  organic  standpoint  gives 
an  intelligible  meaning  to  what  we  may  call  the  'natural  wisdom 
of  the  people.'  The  herd,  the  tribe,  the  nation  is  endowed  with 
instincts  of  self-protection  and  of  growth.  These  instincts  are 
accompanied  by  corresponding  emotions  which,  according  to  the 
degree  of  intelligence  they  contain,  impel  it  to  a  right  or  eco- 
nomical use  of  the  physical  and  spiritual  environment  for  sur- 
vival and  'progress.'  The  instinctive  and  emotional  stream  of 
this  common  life  becomes  more  'rational'  as  the  factors  of  in- 
telligence accompanying  the  emotions  become  clearer,  better 
coordinated  and  endowed  with  larger  capacity  of  central  direc- 
tion. In  the  evolution  of  animal  organisms  this  growth  of  ra- 
tionality implies,  and  is  compassed  by,  a  decline  of  the  special 
instincts  with  a  consequent  weakening  of  the  special  emotions 
attached  to  them,  and  the  substitution  of  a  flexible  general  in- 
stinct operating  through  a  centralised  nervous  system  and  co- 
ordinating the  special  organic  emotions  and  activities  to  serve 
a  more  clearly  conceived  organic  purpose  of  the  individual  or  the 
race.  Reason,  regarded  as  a  motive  power  and  not  as  a  mere 
intellectual  organ,  must  be  considered  as  this  general  instinct  of 
survival  and  growth,  having  its  roots  in  the  apparently  separate 
instincts  of  hunger,  procreation,  shelter,  pugnacity,  flight,  gre- 
gariousness,  protection  of  young,  curiosity,  constructiveness,  ac- 
quisitiveness and  the  like,  and  utilising  the  emotions  proper 
to  these  several  instincts  for  the  economy  of  some  more  general 
plan  of  life.  Reasoning,  as  an  'intellectual  process, '  will  probably 
derive  its  emotional  food  and  impetus  principally  from  the  emo- 
tions carried  by  the  instincts  of  flight  and  pursuit,  which  involve 
quick  judgment  in  the  use  of  means,  and  by  the  curiosity  and 
constructiveness  which  impel  the  more  reflective  study  and  adap- 
tation of  material  environment. 

It  is,  however,  no  purpose  of  mine  to  enter  into  the  particulars 
of  this  theory  of  the  natural  origins  of  reason.  It  is  sufficient 
to  recognise;  first  that  prior  to  the  dawn  of  'reason'  in  organic 
evolution,  the  instincts  carry  and  apply  a  wisdom  of  direction  of 
their  own;  secondly  that  when  reason  takes  over  much  of  this 


358  WORK  AND  WEALTH 

directing  power  it  operates  by  coordinating,  not  by  creating, 
motive  power. 

So  when  we  substitute  for  the  individual  organism  the  herd, 
the  tribe,  the  nation,  ascending  to  larger  collective  wholes,  sus- 
tained by  a  clearer  consciousness  of  unity  and  a  fuller  use  oi 
central  conscious  purpose,  we  follow  the  same  economy  of  gov- 
ernment. If,  as  is  often  urged,  a  nation,  regarded  as  an  organism, 
must  be  classed  as  a  comparatively  primitive  type,  on  a  level 
rather  with  the  sponges  or  algae  than  with  the  higher  animals, 
we  shall  expect  to  find  that  a  very  large  measure  of  such  '  wisdom ' 
as  it  possesses  will  be  instinctive  rather  than  'rational.'  The 
evolution  of  a  general  will,  whether  operative  by  public  opinion 
or  governmental  institutions,  will  on  such  a  hypothesis  possess 
no  great  degree  of  centrality  or  clear  consciousness.  Good  gov- 
ernment in  such  a  society  could  not  be  compassed  by  an  oligarchy 
or  even  a  representative  assembly  assuming  a  measure  of  de- 
tailed and  far-sighted  policy  for  which  the  collective  life  was  not 
yet  ripe.  A  large  measure  of  what  from  the  rational  standpoint 
would  rank  as  'opportunism'  would  be  the  true  policy  at  such 
a  stage  of  social  evolution,  and  the  wise  statesman  would  keep 
his  ear  to  the  ground  so  as  to  learn  the  instinctive  movements  of 
the  popular  mind  which  would  yield  the  best  freight  of  political 
wisdom  at  his  disposal.  Only  as  education  and  closer  and  more 
reliable  communications  elevated  the  organic  structure  of  Society, 
imparting  higher  spirituality,  more  centrality  and  clearer  con- 
sciousness to  its  life,  should  we  expect  any  considerable  rationali- 
sation of  the  general  will.  Meanwhile  arise  the  temptation  and 
danger  of  the  formal  instruments  of  government  falling  into  the 
hands  of  a  little  highly  self-conscious  group  or  class,  who  may  seek 
to  impose  upon  the  conduct  of  the  nation  its  clearer  plans  and 
far-sighted  purposes  "under  the  name  and  pretext  of  the  com- 
monwealth." The  absolute  or  actual  wisdom  of  their  will  they 
will  be  apt  to  represent  as  embodying  the  reality  of  the  general 
will.  It  is  what  they  think  'the  people'  ought  to  will  and  there- 
fore what  the  people  will  come  to  will  as  soon  as  they  are  really 
capable  of  willing  intelligently! 

It  is,  however,  exceedingly  important  to  try  and  recognise  the 
instinctive  wisdom  of  the  people,  in  order  that  a  misrepresenta- 


SOCIAL  SCIENCE  AND  SOCIAL  ART  359 

tive  government  may  be  prevented  from  ignoring  it  and  substi- 
tuting the  rationalism  of  some  little  conscious  class. 

This  does  not  mean  that  a  Government  must  always  govern 
and  adapt  its  laws  to  the  level  of  the  current  feelings,  desires  and 
aspirations  of  the  average  man,  giving  him  no  lead  or  stimulus 
to  higher  rationality.  Such  a  course  would  be  to  ignore  that 
capacity  for  progress  and  that  susceptibility  to  proximate  ideals 
which  are  themselves  implanted  in  the  instincts  of  mankind. 
But  it  does  require  that  a  Government  shall  keep  itself  in  the 
closest  sympathy  with  the  concrete  feelings  and  ideas  of  the  peo- 
ple, maintaining  such  contacts  as  shall  enable  its  acts  of  policy 
to  rank  as  substantially  correct  interpretations  of  the  general  will, 
not  as  the  designs  of  a  supreme  governing  caste  or  group  of  in- 
terests, pumped  down  through  some  artfully  contrived  electoral 
machinery  so  as  to  receive  the  false  formal  impress  of  'the  gen- 
eral will.' 

These  reflections  upon  the  nature  of  popular  government  may 
appear  to  have  carried  us  far  afield.  But  they  have  been  no 
irrelevant  excursion.  For  upon  our  view  of  the  nature  and  meas- 
ure of  rationality  to  be  imputed  to  the  processes  of  reform  or  prog- 
ress in  national  life  must  depend  our  view  of  the  part  which  can 
be  played  by  the  social  sciences  which  are  invoked  as  the  chief 
instruments  of  conscious  collective  conduct. 

Recognising  that  social  progress  in  all  its  departments  re- 
mains always  a  collective  art,  inspired  and  sustained  by  creative 
impulses  which  owe  neither  their  origin  or  their  validity  to  sci- 
ence, we  shall  regard  the  social  sciences  as  servants  rather  than 
directors  of  social  progress.  We  shall  be  concerned  to  ask, 
What  are  the  proper  and  particular  services  such  sciences  can 
render?  How  can  they  assist  a  people  in  utilising  its  human  and 
natural  resources  for  the  attainment  of  the  best  conditions  of 
human  life,  individual  and  social? 

This  work  is  written  as  a  partial  and  illustrative  answer  to 
these  questions.  Taking  industry,  that  department  of  social 
conduct  most  susceptible  of  the  quantitative  measurement  which 
is  the  instrument  of  science,  we  have  endeavored  to  construct 
and  apply  an  organon  of  human  valuation  to  its  activities  and 
achievements.  Recognising  that  industry,  regarded  from  the 


360  WORK  AND  WEALTH 

individual  or  the  social  standpoint,  was  an  organic  activity,  in- 
volving continual  reactions  upon  the  whole  life  of  the  individual 
and  the  society,  we  insisted  that  the  standard  of  valuation  must 
be  constructed  in  terms  of  organic  well-being.  In  other  words,  in- 
dustry, both  from  its  productive  and  its  consumptive  side,  must 
be  valued  in  terms  of  individual  and  social  health,  that  term 
being  selected  as  the  one  which  best  expresses  the  conditions  of 
conservation  and  of  progress  universally  recognised  as  the  essen- 
tials of  a  'valuable'  life.  In  the  actual  interpretation  of  this 
organic  welfare,  we  took  for  our  valuer  'enlightened'  common- 
sense.  The  roots  of  this  common-sense  we  find  laid  in  the 
silent,  instinctive  organic  strivings  of  mankind.  It  is  the 
business  of  science,  or  organised  knowledge,  to  direct  these 
strivings  so  as  to  enable  them  to  attain  their  ends  more  economi- 
cally. It  does  this  by  interpreting  experience  and  supplying 
the  interpretation  in  the  shape  of  'laws'  to  enlighten  common- 
sense  and  so  enable  it  to  choose  its  paths.  For  the  economy  of 
blind  instincts  is  only  accommodated  to  simple  activities  in  a  sta- 
ble environment,  and  is  even  then  subject  to  enormous  vital 
wastes.  For  complicated  activities  in  a  rapidly  changing  and 
complex  environment,  a  general  instinct  of  adaptability  of  means 
to  ends,  involving  conscious  reflection,  is  required.  Reason  is  this 
general  instinct  and  science  is  its  instrument.  Society,  as  its  proc- 
esses of  evolution  become  more  conscious,  will  be  able  to  use  more 
profitably  the  services  of  science.  Those  services  consist  not  in 
authoritative  legislation  for  social  conduct,  for  laws  based  upon 
experience  of  the  past  can  have  no  full  authority  to  bind  the  fu- 
ture. Faith  and  risk-taking,  involving  large  elements  of  the  in- 
calculable, are  inherent  in  organic  processes,  and  are  the  very  sap 
of  spiritual  interest  in  life.  They  can  never  be  brought  under  the 
dominion  of  a  scientific  economy. 

But  the  main  staple  in  every  art  of  conduct  is  repetition  and 
considered  adaptation,  resting  upon  a  continuity  of  conditions. 
For  this  part  of  social  conduct  science,  when  sufficiently  equipped, 
can  and  will  offer  authoritative  advice.  Throughout  all  nature 
the  arts  of  conservation  and  creation  run  together.  The  art 
of  conservation  is  the  practical  function  of  science:  the  art  of 
creation  ever  remains  a  region  of  beckoning  liberty,  continually 


SOCIAL  SCIENCE  AND  SOCIAL  ART  361 

.nnexed  by   science,  and  yet   undiminished   in  its    size   and 
ts  appeal. 

'  For  all  experience  is  an  arch  where  through 
Gleams  that  untravelled  land  whose  margin  fades 
For  ever  and  for  ever  as  we  move.' 


INDEX 


Ability,  costs  of,  53. 

Abstinence,  94. 

Abundance,  161. 

Accidents,  increased  by  fatigue,  67. 

Adulteration,  112,  134. 

Advertising,  218. 

Aged  workers,  80. 

Alien  immigration,  280. 

Animals,  rudimentary  industry,  20. 

Arbitration  and  Conciliation,  277. 

Art,  human  costs,  44;  in  industry,  304; 

in  the  new  economy,  314;  analysis  of 

works  of  art,  330. 
Averages,  defects,  337. 

B 

Bank  holidays,  127. 

Bethlehem  Steel  Works,  205. 

Birth  rate,  319. 

Brassey,  M.,  222. 

Bucher,  Industrial  Evolution,  23. 

Buckle,  M.,  114. 

Bureaucracy,  its  defects,  268;  in  state 

socialism,  268. 
Business,  costs  illustrated,  38;  human 

costs  of  management,  54.     See  also 

Scientific  Management. 


Capital,  250  seq. ;  increase  out  of  income, 
30;  economic  costs,  89;  share  in  in- 
dustry, 92;  sources,  98;  maintenance 
of  177;  anonymity  of,  252;  antago- 
nism to  labour,  252. 

Carnegie,  M.,  294. 


Carpenter,  Edward,  118,  340. 

Casual  labour,  earnings,  190. 

Census  of  Production,  29. 

Chapman,  Prof.,  Work  and  Wages,  173. 

Child  Labour,  80. 

Children,  utility  of  play,  240-241. 

Chiozza-Money,  Things  that  Matter,  280. 

Charity,  161;  its  wastefulness,  157;  its 
ends,  296. 

Citizenship,  necessary  leisure,  248. 

Combination,  253;  trusts,  etc.,  276  seq.; 
international,  279. 

Common  sense,  321. 

Commercial  expansion,  effect  on  con- 
sumption, 122. 

Commercial  Treaties,  272. 

Commercialism,  vitiates  standards,  133. 

Competition,  undue  stress  on,  251;  not 
national,  272;  restrictions,  276.  See 
Combination. 

Consumer,  his  interests  neglected,  257; 
in  the  co-operative  movement,  261; 
conservative  habits,  no;  inequalities 
in  capacity,  in. 

Consumption,  neglected  by  economists, 
4;  human  utility,  37,  106  seq.;  class 
standards,  121  seq.;  imitative,  130; 
novelties,  129;  economy  of,  137;  in- 
fluenced by  prestige,  139;  tabular 
statement,  159;  scientific,  221;  con- 
ventional, 243. 

Conventional  standards,  125  seq. 

Cooperation,  in  division  of  labour,  251; 
social,  200, 303;  in  consumption,  109. 

Cooperative  Movement,  200,  256,  259, 
264. 

Co-partnership,  254  seq. 

Cost,  tabular  statement,  159. 

Costs  of  labour,  varying  incidence,  79; 


363 


364 


INDEX 


psychical,  219. 

Costs  of  production,  35  seq.,  203;  gener- 
al categories,  38  seq. 

Costs  of  progress,  178. 

Craftsmanship,  69. 

Creative  work,  41;  under  scientific 
management,  219;  exemption  from 
social  control,  292. 

Credit,  5  7, 345. 

Culture,  wasteful  expenditure  on,  152. 

D 

Dancing,  accompanies  early  industry, 

25- 

Democracy,  170,  241. 

Dietetics,  222. 

Dilettantism,  153. 

Diminishing  returns,  315. 

Disinterestedness,  356. 

Distribution,  organic  law,  vi,  157,  237, 
283.  See  also  Consumption. 

Distribution  of  labour,  164,  311. 

Distribution  of  leisure,  228. 

Distribution  of  wealth,  163;  actual  and 
"human"  compared,  176;  insufficient 
share  of  labour,  178.  See  also  Con- 
sumption. 

Division  of  labour,  210,  250. 

Drink  Bill,  127. 


Early  closing,  Report,  81. 

Economics,    mechanical    tradition,    7; 

boundaries  of,  8. 
Eden,  M.,  222. 
Education,  false  standards  of  utility, 

152;  the  place  of  leisure,  153. 
Efficiency,  personal  and  social,  310  seq. 
Eight-hours  day,  231,  349. 
Employment,  regularity,  198. 
Environment,  effects  on  consumption, 

120;  effect  of  rapid  changes,  129. 
Equality  of  opportunity,  165. 
Ergograph,  67. 
Eugenics,  316. 


Evolution,  of  human  society,  119,  336 

seq.;  instinct  and  reason,  355. 
Exchange,  3. 


Fabre,  Henri,  Modern  Theory  of  Instinct, 

352- 

Factories  and  workshops,  77. 
Family,  as  unit  of  consumption,  109, 

222,  242,312. 
Fashion,  139. 

Fatigue,  relation  to  accidents,  67. 
Fatigue,  nervous,  physiologists  on,  65. 
Fatigue,  physical  biologists  on,  63-65. 
Finance,  its  normal  honesty,  57. 
Financial  operations,  human  costs,  56. 
Flux,  M.,  estimate  of  British  income,  29. 
Foreign  trade,  273. 
Foster,  Sir  Michael,  Weariness,  63. 
Franklin,  Benjamin,  333. 
Free  contract,  201. 
Free  trade,  272. 
French  Revolution,  the  "general  call", 

354- 


Geddes,  Prof.,  114. 

"General  will",  353. 

Genius,  undiscovered,  51. 

Gilbreth,  F.  G.,  Bricklaying  System,  207. 

Gladstone,  M.,  329. 

Goldmark,  Fatigue  and  Efficiency,  64, 

66,  67, 81. 
Gould,  Jay,  99. 
Guild  societies,  266. 

H 

Haldane,  Dr.,  Mechanism,  Life  of  Per- 
sonality, 1 8. 

Half-timers,  82. 

Hobson,  J.  A.,  The  Industrial  System, 
189. 

Hours  of  labour,  231;  relation  to  acci- 
dent, 67;  diagrams,  68, 69. 

Hugo,  Victor,  Quatre-vingt-treize,  180. 


INDEX 


365 


Imitation,  130;  psychology  of,  41. 
Imitative  work,  60.    See  also  Routine 

work. 

Income,  real  income,  28  seq.;  British 
national,  29;  relation  to  welfare,  31; 
human  value,  33;  national  income, 
34~35-  See  also  Surplus. 
Individual  standards,  of  consumption, 
136,  158;  of  production,  311. 

Industrial  agreements,  258. 

Industrial  conditions,  effect  on  con- 
sumption, 123. 

Industrial  efficiency,  psychological  tests, 
214.  See  also  Scientific  Management. 

Industrialism,  242;  laissez-faire,  170;  ill 
effects,  290. 

Industry,  fabric  of,  5;  of  animals,  20; 
human  origins,  19  seq.;  of  primitive 
man,  21;  organisation,  161;  scientific 
investigation,  225;  humanist  criticism, 
229;  reconstruction,  250  seq.;  coop- 
eration and  coordination,  303;  sum- 
mary of  conclusions,  182. 

Insurance,  industrial,  104. 

International  combines,  279. 

International  Postal  Union,  281. 

Internationalism,  of  capital,  274;  of 
labour,  274. 

Invention,  41;  creative  quality,  49. 

Iron  and  steel,  international  combine, 
280. 


Jevons,  W.  S.,  5. 


Labour,  physical  costs,  60  seq.;  psychi- 
cal costs,  67;  defined,  70;  human 
claims,  190. 

Labour  Movement,  its  demand,  190; 
political  action,  199;  cosmopolitan 
organisation,  275. 

Land,  monopoly,  181.    See  also  Rent. 

Le  Play,  114. 


Leisure,  228;  use  of,  237,  246. 
Leisure  class,  141;  imitated,  155. 
Living  wage,  196. 
Luxuries,  122,  245. 

M 

MacCormac,  81. 

McDougall,  Social  Psychology,  356. 

Machinery,  skilled  labour  required,  72; 

relief  afforded  by,  76-77;  limitations, 

76. 
Machine-tending,  70  seq.;  human  cost, 

61. 

Mai-production,  161. 
Man,  social  history,  23;  evolution,  350. 
Marginal  expenditure,  344. 
Marginal  preferences,  327, 334. 
Marginalism,  331. 
Marginalist  doctrine,  172  seq. 
Market,  the,  263. 
Medicine,  primitive,  130. 
Mendelieff,  49. 
Migration,  of  labour,  274. 
Mill,  J.  S.,  326. 
Minimum  wage,  197,  347. 
Monetary  standard,  29. 
Monopoly,  181,  257. 
Mosso,  64,  66. 

Municipality,  as  employer,  269,  283. 
Munsterberg,  Prof.,  215;  Psychology  and 

Industrial  Efficiency,  212. 
Mutual  aid,  304. 

N 

Nation,   the,   organic   structure,   358; 

expenditure,  340. 
National  income.    See  Income. 
Nations,  artificial  barriers,  272. 
Neurasthenia,  67. 


Organic  welfare,  vi,  12;  relation  to  na- 
tional income,  32;  in  consumption, 
161;  in  state  services,  288;  in  the 
new  economy,  301  seq. 


366 


INDEX 


Organic  Law  of  Distribution.  See  Dis- 
tribution. 

Output,  as  wage-basis,  167;  limitation 
of  individual  output,  198;  under 
scientific  management,  208. 

Overtime,  243. 

Owen,  Robert,  222. 


Parasitism,    296. 

Pascal,  350. 

Peel,  M.  George,  Future  of  England,  238. 

Personal  efficiency,  310. 

Personal  expenditure,  327  seq. 

Personal  liberty,  85. 

Pigou,  Prof.,  Wealth  and  Welfare,  32, 

174,  338. 

Play,  240.    See  also  Sport. 
Political  Economy.    See  Economics. 
Politics,    social    science    applied,    347; 

quantitative  analyses,  167. 
Popular  government,  share  of  instinct, 

357- 

Population,  316,  318. 
Poverty,  243. 
Prestige,  139, 150. 
Primitive  man,  22,  116,  122. 
Private  enterprise,  in  the  new  economy, 

293- 

Producer,  257;  divergence  of  group 
interests,  266. 

Production,  human  costs,  35,  36;  crea- 
tive factor,  44;  share  of  labour,  61; 
tabular  statement,  159;  artistic  and 
routine,  303. 

Productive  consumption,  123. 

Professional  services,  52,  54. 

Profit-sharing,  255. 

Protection,  272,  348. 

Property,  294;  an  ethical  basis,  298. 

R 

Races,  156;  in  industry,  314. 
Railways,  state  control,  258. 
Ramsay,  Sir  W.,  49. 


Rent,  38,  171,  181,  278;  individual,  169; 

contribution  to  capital,  96. 
Reynolds,  W.  Stephen,  238. 
Ricardo,  60. 

Risks  of  business,  human  costs,  89. 
Robertson,  J.  M.,    The    Evolution   of 

States,  114. 

Rockefeller,  J.  D.,  99,  294. 
Routine  work,  304,  313. 
Rowntree,  M.,  242. 
Ruskin,  John,  9, 12,  46,  62, 106;  Munera 

Pulveris,  10;  Time  and  Tide,  313, 316. 


Salary  basis,  195. 

Satiety,   161. 

Saving,  92,  102, 104. 

Scientific  analysis,  164  seq. 

Scientific  Management,  202;  increased 
output,  209;  human  costs,  212,  218; 
Munsterberg  on,  212. 

Seasonal  trades,  80,  230. 

Self-governing  workshop,  256. 

Smiles,  Samuel,  333. 

Smith,  Adam,  60,  186;  Wealth  of  Na- 
tions, 251. 

Social  instinct,  351. 

Social  science,  322. 

Social  service,  283. 

"Social  will",  301. 

Socialist  state,  97. 

Society,  organic  structure,  13,  16,  306, 

351- 

Sociology,  scope  of,  15. 

Sombart,  The  Jews  and  Modern  Capital- 
ism, 224. 

Specialisation  of  labour,  costs  of,  70. 

Speeding-up,  206,  233. 

Sport,  146  seq.;  moral  standards,  153. 

Standard  of  comfort,  96. 

Standard  of  consumption,  343. 

Standard  of  living,  113, 166;  class  stand- 
ards, 121;  minimum,  168;  subsidised 
by  the  state,  200;  science  applied,  251; 
standardisation  in  industry,  202. 


INDEX 


367 


State,  the  costs  of,  178;  control  of  in- 
dustry, 258,  294;  as  employer,  269, 
283;  subsidies,  200. 

State  socialism,  268  seq. 

Statistics,  limitations,  323. 

Surplus,  unproductive,  138,  256. 

Surplus  income,  of  rich,  98;  of  middle 
class,  101;  taxation,  276. 

Surplus  profits,  183,  276. 

Survival  value,  118. 

Sweated  imports,  280. 

Sweated  labour,  179.  See  also  Trade 
Boards. 

Syndicalism,  264  seq. 


Tarde,  M.,  7, 40, 50, 85, 127. 

Tariffs,  272. 

Taxation,  188. 

Taussig,  Principles  of  Economics,  100. 

Taylor,    M.,    Principles    of   Scientific 

Management,  205,  210. 
Technical  instruction,  204. 
Thoreau,  239. 
Trade  Board,  197. 
Treves,  Prof.,  66. 
Trusts.    See  Combination. 

U 

Under  employment,  199. 

Unearned  surplus,  96, 187. 

Unemployables,  229. 

Unemployment,  229,  162. 

Unproductive  surplus,  181  seq.  See  also 
Waste. 

Utility,  tabular  statement,  159;  of  con- 
sumption, 36, 106  seq.,  169,  221-223. 


Value,  humanist  standard,  v,  i  seq.; 

Ruskin's  theory,  9;  social  standard, 

162;  extra  scientific  standard,  150. 

See  also  Organic  Welfare. 
Veblen,  M.,  Theory  of  the  Leisure  Class, 

141. 

W 

Wage  Boards,  258. 

Wages,  166;  M.  Well's  analysis,  190; 
piece  work  or  salary,  192;  economy 
of  high  wages,  196;  under  scientific 
management,  216;  real  wages,  254; 
under  cooperative  movement,  259. 

Wallas,  M.  Graham,  Human  Nature 
and  Politics,  328. 

Wasps,  Social  instincts,  352. 

Watts,  D.,  239. 

Watts,  G.F.,  45. 

Waste,  in  consumption,  118  seq.;  on 
sport,  159. 

Wealth,  3;  Ruskin's  view,  9;  monetary 
standard,  29;  tabular  statement,  159. 

Webb,  M.  Sydney,  190. 

Wicksteed,  Common  Sense  of  Political 
Economy,  8, 173,  328. 

Working  classes,  expenditure,  125  seq.; 
wasteful  'thrift',  179;  marginal  ex- 
penditure. See  also  Family,  Stand- 
ard of  Living,  126. 

Women,  employment,  82;  cost  of  labour, 
80;  in  early  arts,  25;  wages,  191. 

Wordsworth,  Wm.,  239. 

World  state,  274, 280. 


Young,  Arthur,  222. 


Printed  in  the  United  States  of  America. 


11 


THE  LIBRARY 
UNIVERSITY  OF  CALIFORNIA 

Santa  Barbara 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED  BELOW. 


Series  9482 


A     000  683  802     3 


